STWD 10-K & 10-Q changes, risk factors and insider trading

We are subject to conflicts of interest arising out of our relationship with Starwood Capital Group, including our Manager. Specifically, Mr. Sternlicht, our Chairman and Chief Executive Officer, Jeffrey G. Dishner, onetwo of our other directors,directors and certain of our executive officers are executives of Starwood Capital Group.

Our Manager and executive officers may have conflicts between their duties to us and their duties to, and interests in, Starwood Capital Group and its other investment funds. FromFor example, from time to time, one or more private investment funds sponsored by Starwood Capital Group (collectively, “Starwood Private Real Estate Funds”) may be subject to exclusivity provisions that require all or a portion of investment opportunities related to real estate to be allocated to such Starwood Private Real Estate Funds rather than to us. Subject to the provisions of theour co-investment and allocation agreement as described in the next paragraph,agreement, there can be no assurance that future Starwood Private Real Estate Funds would not be subject to such exclusivity requirements and, as a result, they may acquire investment opportunities that would not be available to us. Our independent directors do not approve each co-investment made by the Starwood Private Real Estate Funds and us unless the amount of capital we invest in the proposed co-investment otherwise requires the review and approval of our independent directors pursuant to our investment guidelines.us. Pursuant to the exclusivity provisions of the Starwood Private Real Estate Funds, our investment strategy may not include either (i) equity interests in real estate or (ii) “near-to-medium-term loan to own” investments, in each case (of both (i) and (ii)) if such investments are expected, at the time such investment is made, to produce an internal rate of return (“IRR”) within the target return threshold specified in the governing documents of one or more Starwood Private Real Estate Funds. Therefore, our board of directors does not have the flexibility to expand our investment strategy to include equity interests in real estate or “near-term loan to own” investments with such an IRR expectation.

OurPursuant to our co-investment and allocation agreement, our Manager, Starwood Capital Group and their respective affiliates (i) may not sponsor or manage oneany orU.S. morepublicly-traded publicly traded investment vehicles, public reporting vehicles or fundsvehicle that invest generally in real estate assets but notinvests primarily in our “target assets” (as defined in our co-investment and allocation agreement) and (ii) may sponsor or manage one or more publiclyU.S. tradedpublicly-traded investment vehicles, public reporting vehicles, or fundsvehicles that doinvest investgenerally in somereal ofestate assets but not primarily in our “target assets” (a “potential competing vehicle”). Our Manager and Starwood Capital Group have also agreed in our co-investment and allocation agreement that for so long as the management agreement is in effect and our Manager and Starwood Capital Group are under common control, no entity controlled by Starwood Capital Group will sponsor or manage a potential competing vehicle, or any private or foreign “competing vehicle” (a vehicle that invests primarily in our “target assets,” excluding any investment vehicle that invests predominantly in non-U.S. mortgage assets) unless Starwood Capital Group adopts a policy that either (i) provides for the fair and equitable allocation of investment opportunities in our “target assets” (as defined in our co-investment and allocation agreement) among all such vehicles and us or (ii) provides us the right to co-invest with respect to any “target assets” (as defined in our co-investment and allocation agreement) with such vehicles, in each case subject to the suitability of each investment opportunity for the particular vehicle and us and each such vehicle’s and our availability of cash for investment. To the extent that there is overlap between our investment program and that of a Starwood Private Real Estate Fund, a fair and equitable allocation policy may involve a co-investment between us and such Starwood Private Real Estate Fund or a chronological rotation between us and such Starwood Private Real Estate Fund. Although Starwood Capital Group has adopted such an investment allocation policy, Starwood Capital Group has some discretion as to how investment opportunities are allocated. As a result, we may either not be presented with the opportunity to participate in these investments or may be limited in our ability to invest.

CertainOur Chairman and Chief Executive Officer, two of our other directors and certain of our executive officers and two of our directors are executives of Starwood Capital Group. Our management agreement with our Manager was negotiated between related parties and its terms, including fees payable, may not be as favorable to us as if it had been negotiated with an unaffiliated third party.

Our conflictsrelated ofparty interesttransaction policy may not adequately address all of the conflicts of interest that may arise with respect to our investment activities and also may limit the allocation of investments to us.

InOur orderboard of directors has adopted a related party transaction policy, which covers transactions that exceed, or are expected to avoidexceed, $120,000 in any actualfiscal oryear perceivedbetween conflictsus of interest with our Manager, Starwood Capital Group, any of their affiliates or any investment vehicle sponsored or managed by Starwood Capital Group (or any of itsour affiliates,consolidated whichsubsidiaries) weand refer to as the Starwood parties, we have adopted a conflictsany of interestour policydirectors toor specificallydirector addressnominees, someexecutive officers, beneficial owners of 5% or more of our common stock, any immediate family members of the conflicts relating toforegoing, our investmentManager opportunities.or any affiliates controlled by us or Starwood Capital Group. Although under this policy the approval of a majority of ourthe independent disinterested members of our board of directors (the “Reviewing Directors”) is required to approve (i)any such covered transaction, and any purchasesuch approval requires a determination in good faith by the Reviewing Directors that the transaction is in the best interests of our assets by any of the Starwood partiescompany and (ii)our any purchase by us of any assets of any of the Starwood parties,stockholders, this policy may not be adequate to address all of the conflicts that may arise or may not address such conflicts in a manner that results in the allocation of a particular investment opportunity to us or is otherwise favorable to us. In addition, the Starwood Private Real Estate Funds currently, and additional competing vehicles may in the future, participate in some of our investments, possibly at a more senior level in the capital structure of the underlying borrower and related real estate than our investment. Our interests in such investments may also conflict with the interests of these entities in the event of a default or restructuring of the investment. Participating investments will not be the result of arm’s length negotiations and will involve potential conflicts between our interests and those of the other participating entities in obtaining favorable terms. Since certain of our executives are also executives of Starwood Capital Group, the same personnel may determine the price and terms for the investments for both us and these entities and any procedural protections, such as obtaining market prices or other reliable indicators of fair value, may not prevent the consideration we pay for these investments from exceeding their fair value or ensure that we receive terms for a particular investment opportunity that are as favorable as those available from an independent third party.

Accounting Standards UpdateCodification 2016-13,Topic “Financial326 Instruments—Creditmandates Losses,the Measurementuse of Credita Lossescurrent on Financial Instruments (Topic 326),” which replaced the “incurred loss” model for recognizingexpected credit losses with an “expected loss” model referred to as the Current Expected Credit Loss model (“CECL”) became effective for us on January 1, 2020. Under the CECL model, we are required to provide allowances forproviding credit lossesloss allowances on certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity debt securities, including related future funding commitments and accrued interest receivable. The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.amounts. ThisThe measurement takes place at the time the financial asset is first added to the balance sheet and updated quarterly thereafter. This differs significantly from the “incurred loss” model previously required under GAAP, which delayed recognition until it was probable a loss had been incurred. Accordingly, the adoptionuse of the CECL model has materially affected, and will continue to materially affect, how we determine our credit loss provision and has required us, and could continue to require us, to significantly increase our allowance and recognize provisions for credit losses earlier in the lending cycle. Moreover, the CECL model creates more volatility in the level of our credit loss provisions. If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial condition.

In addition, distributions that we make to our stockholders are generally taxable to our stockholders as ordinary income. However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock.

Our financing sources currently include our bank credit facilities, our repurchase agreements, our CLOs, our singleSASB, assetour securitization (“SASB”),ABSs, our convertible senior notes, our unsecured senior notes, our mortgage debt on certain investment properties and equity and debt offerings. Subject to market conditions and availability, we may seek additional sources of financing in the form of additional bank credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities, structured financing arrangements, public and private equity and debt issuances and derivative instruments, in addition to transaction or asset-specific funding arrangements.

We currently have a significant amount of indebtedness outstanding. As of December 31, 2024,2025, our total consolidated indebtedness was approximately $17.3$22.1 billion (excluding accounts payable, accrued expenses, other liabilities, VIE liabilities and unfunded commitments). Our outstanding indebtedness currently includes our bank credit facilities, our repurchase agreements, our CLOs, our SASB, our ABSs, our convertible senior notes, our unsecured senior notes and mortgage debt on certain investment properties. Subject to market conditions and availability, we may incur additional debt through bank credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities, structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset-specific funding arrangements. The percentage of leverage we employ varies depending on our available capital, our ability to obtain and access financing arrangements with lenders and the lenders’ and rating agencies’ estimate of the stability of our investment portfolio’s cash flow. Our governing documents contain no limitation on the amount of debt we may incur. We may significantly increase the amount of leverage we utilize at any time without approval of our board of directors. However, our secured debt agreements contain customary affirmative and negative covenants, including financial covenants, that in some cases restrict our total leverage (as defined therein). Moreover, the respective indentures governing our unsecured senior notes contain covenants that, subject to a number of exceptions and adjustments, among other things, limit our ability to incur additional indebtedness and require that we maintain total unencumbered assets (as defined therein) of not less than 120% of the aggregate principal amount of our outstanding unsecured indebtedness (as defined therein). In addition, we may leverage individual assets at substantially higher levels. Incurring substantial debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that:

If financial institutions with whom we seek to finance our investments require that one or more of our Manager’s executives continue to serve in such capacity and if one or more of our Manager’sthose executives are no longer employed by our Manager, it may constitute an event of default and the financial institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to our ability to finance our future investments with that institution. If we are unable to obtain financing for our accelerated borrowings and for our future investments under such circumstances, we could be materially and adversely affected.

Our results of operations are materially affected by conditions in the real estate markets, the financial markets and the economy generally. Concerns about the real estate market, inflation, energy costs, geopolitical issuesissues, tariff policies and the availability and cost of credit have contributed to increased volatility and diminished expectations for the economy and markets going forward, any of which could adversely affect our business and financial results.

The residential mortgage market has been affected by changes in the lending landscape, and there is no assurance that these conditions have stabilized or that they will not worsen. The disruption in the residential mortgage market has an impact on new demand for homes, which weigh on future home price performance. There is a strong inverse correlation between home price growth rates and mortgage loan delinquencies. In addition, the office sector hascontinues beento be adversely affected by a decrease in demand, including as adiscussed result of an increase in remote and hybrid working arrangements,below, and the retail sector continues to be adversely affected by the continued growth in e-commerce. Deterioration in the real estate market may cause us to experience losses related to our assets and to sell assets at a loss. Declines in the market values of our investments may adversely affect our results of operations and credit availability, which may reduce earnings and, in turn, cash available for distribution to our stockholders.

Remote and hybrid working arrangements, flexible work schedules, open workplaces, videoconferencing, and teleconferencing have becomecontinued to be more common, and thesehave trends accelerated as a result of the recent COVID-19 pandemic. These practices haveenabled, and may continue to enableenable, businesses to reduce their office space requirements. There is also an increasing trend among some businesses to utilize shared office spacesspaces, andincluding co-working spaces.environments. These trends have contributed to decreased overall demand for office space and, in turn, have placeplaced downward pressure on occupancy, rental rates and property valuations, each of which has and may continue to adversely affect the value of investments secured by office properties, which could have an adverse effect on our business, results of operations, liquidity and financial condition.

• a reduction in demand for commercial or multifamily properties, including, in the case of office properties, as a result of an increase in remote and hybrid working arrangementsproperties;

• changes in governmental laws and regulations, including fiscal and trade policies, zoning ordinances and environmental legislation and the related costs of compliance; and

• changes in governmental laws and regulations, including fiscal and trade policies, zoning ordinances and environmental legislation and the related costs of compliance;

We may invest in commercial properties subject to net leases, which could subject us to losses.

We may invest in commercial properties subject to net leases.leases, including as a result of our acquisition of Fundamental in July 2025. Typically, net leases require the tenants to pay substantially all of the operating costs associated with the properties. As a result, the value of, and income from, investments in commercial properties subject to net leases will depend, in part, upon the ability of the applicable tenant to meet its obligations to maintain the property under the terms of the net lease. If a tenant fails or becomes unable to so maintain a property, we will be subject to all risks associated with owning the underlying real estate. Under many net leases, however, the owner of the property retains certain obligations with respect to the property, including, among other things, the responsibility for maintenance and repair of the property, to provide adequate parking, maintenance of common areas and compliance with other affirmative covenants in the lease. If we were to fail to meet any such obligations, the applicable tenant could abate rent or terminate the applicable lease, which could result in a loss of our capital invested in, and anticipated profits from, the property.

•a reduction in demand for commercial or multifamily properties, including in the case of office properties as a result of an increase in remote and hybrid working arrangements;

Most of the assets in our Investing and Servicing Segment are held through a TRS, which is subject to entity level taxes on income that it earns. Taxes on income from such assets have materially increased the taxes paid by our TRS.TRSs.

Certain provisions of the Maryland General Corporation Law (the “MGCL”) that are applicable to Maryland REITs,corporations, such as the Company, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock. We are subject to the “business combination” provisions of the MGCL that, subject to limitations, prohibit certain business combinations (including a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our then outstanding voting capital stock or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding voting capital stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder. After the five-year prohibition, any business combination between us and an interested stockholder generally must be recommended by our board of directors and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding shares of our voting capital stock and (ii) two-thirds of the votes entitled to be cast by holders of voting capital stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These super-majority voting requirements do not apply if our common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. These provisions of the MGCL also do not apply to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution exempted business combinations between us and any other person, provided that such business combination is first approved by our board of directors (including a majority of our directors who are not affiliates or associates of such person).

If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income taxtax, and applicable state and local taxes, on our taxable income at regular corporate rates, and distributions made to our stockholders would not be deductible by us in computing our taxable income. In addition, we could possibly be subject to the corporate alternative minimum tax and the 1% excise tax on stock repurchases (and certain economically similar transactions), effective for taxable years beginning after December 31, 2022. Any such tax liability could be substantial and would reduce the amount of cash available for distribution to our stockholders, which in turn could have an adverse impact on the value of our common stock. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year in which we failed to qualify as a REIT.

The maximum tax rate applicable to “qualified dividends” payable by regular U.S. corporations to domestic stockholders that are individuals, trusts or estates is currently 20%. Dividends payable by REITs generally are not eligible for that reduced rate. However, pursuant to the 2017 Tax Cuts and Jobs Act and the 2025 One Big Beautiful Bill Act, such domestic stockholders may generally be allowed to deduct from their taxable income one-fifth of the ordinary dividends payable to them by REITs for taxable years beginning before January 1, 2026.REITs. This would amount to a reduction in the effective tax rate on REIT dividends as compared to prior law. To qualify for this deduction, the domestic stockholder receiving such dividend must hold the dividend-paying REIT shares for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the shares become ex-dividend, and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property.

Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. federal, state and local or non-U.S. taxes on our income and assets, including taxes on any undistributed income, taxes on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes, such as mortgage recording taxes. For instance, we currently hold loans related to our Infrastructure Lending Segment, and may hold any newly originated infrastructure loans, through one or more domestic or foreign subsidiaries that are either disregarded as separate from our company for U.S. federal income tax purposes or, to aid in the maintenance of our status as a REIT under the Code, that have elected to be treated as a TRS. Any such domestic subsidiary that elects to be treated as a TRS will be subject to U.S. taxation under the general rules applicable to corporations (as described further below). Furthermore, certain interest payments to us or to any such domestic or foreign subsidiary made by the underlying borrowers with respect to the infrastructure loans may be subject to withholding taxes in the jurisdictions in which the related facilities or borrowers are located, which would reduce the net proceeds from such payments that are received by us. In addition, in order to continue to meet the REIT qualification requirements, prevent the recognition of certain types of non-cash income, or to avert the imposition of a 100% tax that applies to certain gains derived by a REIT from dealer property or inventory, we may hold a significant amount of our assets through our TRSs or other subsidiary corporations that will be subject to corporate-level income tax at regular rates. Although REITs are not subject to the corporate alternative minimum tax, a TRS may be subject to this tax if a TRS’s three-year average annual adjusted financial statement income exceeds $1 billion. Furthermore, if we lend money to a TRS, the TRS may be unable to deduct all or a portion of the interest paid to us, which could result in an even higher corporate-level tax liability. Any of these taxes would decrease cash available for distribution to our stockholders.

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of MBS. The remainder of our investment in securities (other than government securities, securities of a TRS, and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of a TRS, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% for taxable years beginning after December 31, 2017 and before January 1, 2026) of the value of our total securities can be represented by securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate from our portfolio otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect us and our stockholders. We cannot predict how changes in the tax laws, or the expiration of certain tax provisions in the 2017 Tax Cuts and Jobs Act that are subject to “sunset” for taxable years beginning after December 31, 2025,laws might affect us or our stockholders. New legislation, U.S. Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification.

Our board of directors has approved very broad investment guidelines for our Manager and does not approve each investment and financing decision made by our Manager unless required by our investment guidelines.Manager.

Our Manager is authorized to follow very broad investment guidelines which enable our Manager to make investments on our behalf in a wide array of assets. Our board of directors will periodically review our investment guidelines and our investment portfolio but will not, and will not be required to, review all of our proposed investments, except that any investment that is equal to or in excess of $250.0 million but less than $400.0 million will require approval of the investment committee of our board of directors and any investment that is equal to or in excess of $400.0 million will require approval of our board of directors.investments. See Item 1. "Business—Investment Guidelines” in this Form 10-K for additional information regarding these investment guidelines. In addition, in conducting periodic reviews, our board of directors may rely and may make investments through affiliates primarily on information provided to them by our Manager. Furthermore, our Manager may use complex strategies, and transactions entered into by our Manager may be costly, difficult or impossible to unwind by the time they are reviewed by our board of directors. Our Manager (or such affiliates) has great latitude within the broad parameters of our investment guidelines in determining the types and amounts of target assets it decides are attractive investments for us, which could result in investment returns that are substantially below expectations or that result in losses, which would materially and adversely affect our business operations and results. Further, decisions made and investments and financing arrangements entered into by our Manager may not fully reflect the best interests of our stockholders.

Cybersecurity incidents and cyber-attacks, ransomware attacks, and social engineering attempts (including business email compromise attacks) have been occurring globally at a more frequent and severe levellevel, with increasing sophistication, including through the use of artificial intelligence, and will likely continue to increase in frequency and sophistication in the future. There have been a number of recent highly publicized cases involving the dissemination, theft and destruction of corporate information as a result of a failure to follow procedures by employees or contractors or as a result of actions by a variety of third parties. There can be no assurance that the measures we take to ensure the integrity of our systems will provide protection, especially because cyberattack techniques used change frequently,frequently and with increasing sophistication, may persist undetected over extended periods of time, and may not be mitigated in a timely manner to prevent or minimize the impact of an attack. We regularly encounter phishing attempts and unsuccessful attacks, and we believe our layered security approach has effectively protected us.us, but there can be no assurance that cybersecurity intrusions will not occur or, if they do occur, that they will be adequately addressed. The loss, disclosure or misappropriation of, or unauthorized access to, information or our failure to meet our obligations could result in damage to our reputation, legal claims or proceedings, penalties and remediation costs. See Item 1C—"Cybersecurity” in this Form 10-K for a discussion of how we address these cybersecurity risks.

We are subject to risks from natural disasters such as earthquakes, wildfires and severe weather, including as the result of global climate changes,weather which may result in damage to our properties.

(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.

During 2023, inflation began to moderate as a result of the monetary policy tightening actions taken by the Federal Reserve, including repeatedly raising interest rates. WhileAlthough the Federal Reserve began to lower interest rates in September 2024,2025, interestafter having held rates steady for a year, it is not clear what actions it may remaintake neargoing recentforward highsgiven the uncertain economic effects of tariffs which creates uncertainty forincrease the economypossibility andof foran oureconomic borrowers.slowdown as well as inflationary pressures in the U.S. Elevated interest rates and tariffs over time may adversely affect our existing borrowers and leadour totenants. nonperformance as higherHigher costs may dampen consumer spending and slow income growth, which may negatively impact the collateral underlying certain of our loans.loans Additionally,and elevatedcertain interestof ratesour commercial assets subject to net lease whose customer base could be adversely affectimpacted. Rates can also impact the value of commercialreal estate, including the real estate we own andas thatwell collateralizesas the real estate collateralizing our loans. It remains difficult to predict the full impact of recent events and any future changes in tariffs, interest ratesrates, orinflation 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.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 CECL reserves, particularly if market conditions relevant to the office sector do not improve. Any such reserve increases are difficult to predict.

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

◦€107.5£235.0 million ($111.4$315.4 million) first mortgage loan secured by a14 shoppingassisted centerliving facilities located inacross Ireland,the United Kingdom, which the Company fully funded subsequent to year end.funded.

◦$63.5€217.6 million ($251.1 million) first mortgage loan secured by aan multifamilyindustrial propertylogistics portfolio located in Florida,Ireland, of which the Company funded $51.6$192.1 million.

◦$59.6$192.9 million first mortgage bridge loan tosecured refinanceby a Classpre-leased Adata industrial propertycenter located in New York,Texas, of which the Company funded $56.8$21.0 million.

◦$100.0$107.1 million first mortgage bridge loan secured by a portfolio of sixpre-leased data center assets located acrossin Wisconsin, of which the westernCompany Unitedfunded States.$8.9 million.

•Received gross proceeds of $3.6$669.7 billionmillion ($1.5$183.0 billion,million, net of debt repayments) from maturities and principal repayments on our commercial loans and investment securities.

•In May 2024, we refinancedRefinanced a pool of our infrastructurecommercial loans held-for-investment in November 2025 through a CLO, STWD 2024-SIF3.2025-FL4. The CLO has a contractual maturity of AprilDecember 20362042 and a weighted average cost of financing of SOFR + 2.41%,1.85%, inclusive of the amortization of deferred issuance costs. On the closing date, the CLO issued $400.0$1.1 millionbillion of notes, of which $330.0$968.6 million of notes waswere purchased by third party investors and $70.0$135.2 million of subordinated notes were retained by us.

•InRefinanced May 2024, we refinanced $600.0$126.1 million of outstandingthe Woodstar Fund investments’ mortgage debt onin ourOctober Medical Office Portfolio due November 20242025 with $450.5$245.9 million of senior securitized mortgagenew debt and a $39.5 million mezzanine loan. The new debtthat carries an initial term of two10 years, followed by three successive one-year extension options and a weighted average coupon of SOFR + 2.52%.1.76%.

•Originated or acquired commercial conduit loans of $1.8$153.0 billion.million.

•Received proceeds of $1.7$372.9 billionmillion from sales of previously originated or acquired commercial conduit loans.

•Acquired CMBS for a purchase price of $187.5$107.2 million, of which $8.7 million related to non-controlling interests, and sold CMBS for total gross proceeds of $12.9 million, of which $2.8$5.8 million related to non-controlling interests.

We have four reportable business segments as of MarchJune 31,30, 2026 and we refer to the investments within these segments as our target assets:

•Acquired 32 additional net lease properties for cash of $129.6 million and sold onenine portfolioproperties andsubject to two single-assetmaster net lease propertiesleases for $22.4 million, recognizing a total net gain of $0.5 million.

•Obtained one new special servicing assignment for CMBS trusts with a total unpaid principal balance of $250.0 million, while $2.8 billion matured and $351.8 million transferred, bringing our total named special servicing portfolio to $94.6 billion.billion as of March 31. 2026.

Refer to Note 24 to the Condensed Consolidated Financial Statements for disclosure regarding significant transactions that occurred subsequent to MarchJune 31,30, 2026.

The following table compares our summarized results of operations for the three months ended MarchJune 31,30, 2026, December 31, 20252026 and March 31, 2026 and for the six months ended June 30, 2026 and 2025 by business segment (amounts in thousands):

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended DecemberMarch 31, 20252026

For the three months ended MarchJune 31,30, 2026, revenues of our Commercial and Residential Lending Segment increased $9.4$19.6 million to $344.6$364.2 million, compared to $335.2$344.6 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a $10.0$16.8 million increase in interest income from loans and a $3.5 million increase in rental income from foreclosed properties (substantially offset by the increase in rental costs and expenses noted below), partially offset by a decrease in interest income from loans of $1.2 million.. The decreaseincrease in interest income from loans was comprised of a $1.6$17.1 million increase from commercial loans, primarily reflecting higher average loan balances, slightly offset by a $0.3 million decrease from residential loans, partially offset by a $0.4 million increase from commercial loans.

For the three months ended MarchJune 31,30, 2026, costs and expenses of our Commercial and Residential Lending Segment increased $0.5$36.8 million to $189.9$226.7 million, compared to $189.4$189.9 million for the three months ended DecemberMarch 31, 2025.2026. This increase was primarily due to increases of $9.8$29.2 million in credit loss provision, $5.8 million in interest expense and $3.5 million in rental costs and expenses and $1.6 million in general and administrative expenses, partially offset by a $10.6 million decrease in the credit loss provision.expenses. The decreaseincrease in the credit loss provision primarily reflects improveda deterioration in macroeconomic forecasts in the firstsecond quarter of 2026. The increase in interest expense associated with the various financing facilities used to fund a portion of this segment’s investment portfolio was primarily due to higher average borrowings outstanding.

For the three months ended MarchJune 31,30, 2026, net interest income of our Commercial and Residential Lending Segment decreasedincreased $0.7$10.7 million to $171.0$181.7 million, compared to $171.7$171.0 million for the three months ended DecemberMarch 31, 2025.2026. This decrease reflects athe net decreaseincrease in interest income discussed above,income, partially offset by athe slight decreaseincrease in interest expense on our secured financing facilities.facilities, both as discussed in the sections above.

During the three months ended MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the weighted average unlevered yields on the Commercial and Residential Lending Segment’s loans and investment securities, excluding retained RMBS and loans for which interest income is not recognized, were as follows:

For the three months ended MarchJune 31,30, 2026, the weighted average unlevered yields on our commercial loans decreased primarily due to lower average index rates. The weighted average yields on ourand residential loans decreasedand primarilyinvestment duesecurities towere higherrelatively interestunchanged recoveries on former nonaccrual loans infrom the firstprevious quarter of 2025.quarter.

During both the three months ended MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the Commercial and Residential Lending Segment’s weighted average secured borrowing rates,rate, inclusive of the amortization of deferred financing fees, werewas 5.6% and 6.0%, respectively. The decrease in borrowing rates primarily reflects lower average index rates and spreads.5.6%. Interest rate hedges had the effect of reducing thesethe weighted average borrowing costs to 5.2%5.3% and 5.6%5.2% during the three months ended MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, respectively.

For the three months ended MarchJune 31,30, 2026, other incomeloss of our Commercial and Residential Lending Segment decreased $35.9$11.9 million to a loss of $12.9$1.0 million compared to income of $23.0$12.9 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to (i) aan $51.6$8.3 million unfavorablelesser changedecrease in fair value of residential loans and (ii) a $13.0$5.2 million unfavorableincreased change in foreign currencynet gain (loss),on derivatives, partially offset by (iii) thea nonrecurrence$2.0 million unfavorable change in fair value of $26.8RMBS million of impairments recognized on four foreclosed properties in the fourth quarter of 2025 and (iv) a $3.7 million increased net gain on derivatives.investments. The increased net gain on derivatives in the firstsecond quarter of 2026 reflects (i) ana $8.0$17.5 million favorable change in gain (loss) on foreign currency hedges, partially offset by (ii) a $4.3 million lowerhigher gain on interest rate swaps principally related to residential loans.loans, partially offset by (ii) a $12.3 million unfavorable change in gain (loss) on foreign currency hedges. The interest rate swaps are used primarily to hedge our interest rate risk on residential loans held-for-sale and to fix our interest rate payments on certain variable rate borrowings which fund fixed rate investments. The foreign currency hedges are used to fix the U.S. dollar amounts of cash flows (both interest and principal payments) we expect to receive from our foreign currency denominated loans and investments. The unfavorable change in foreign currency gain (loss) and the favorable change in gain (loss) on foreign currency hedges reflectreflects the strengtheningweakening of the U.S. dollar against the pound sterling (“GBP”) and Australian dollar (“AUD”), partially offset by a strengthening against the Euro (“EUR”), in the second quarter of 2026, compared to a strengthening of the U.S. dollar against the GBP and EUR, partially offset by a weakening against the Australian dollar (“AUD”),AUD, in the first quarter of 2026, compared to a weakening of the U.S. dollar against each of those currencies in the fourth quarter of 2025.2026.

For the three months ended MarchJune 31,30, 2026, revenues of our Infrastructure Lending Segment decreasedincreased $7.0$5.6 million to $63.3$68.9 million, compared to $70.3$63.3 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a $7.7$5.6 million decreaseincrease in interest income from loans, reflecting lower average index rates, lowerhigher average loan balances due to net repayments and lower prepayment related income.

For the three months ended MarchJune 31,30, 2026 and December 31, 2025,2026, costs and expenses of our Infrastructure Lending Segment decreasedincreased $2.5$4.0 million to $41.8$45.8 million, compared to $44.3$41.8 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to (i) a $2.9$1.9 million decreaseincrease in interest expense, primarily reflecting lowerhigher average indexborrowings ratesoutstanding, and spreads(ii) a $1.3 million increase in credit loss provision to a provision of $0.3 million in the second quarter compared to a reversal of $1.0 million in the first quarter of 2026.quarter.

For the three months ended MarchJune 31,30, 2026, net interest income of our Infrastructure Lending Segment decreasedincreased $4.7$3.7 million to $25.1$28.8 million, compared to $29.8$25.1 million for the three months ended DecemberMarch 31, 2025.2026. The decreaseincrease reflects the decreaseincrease in interest income from loans, partially offset by the decreaseincrease in interest expense on the secured financing facilities used to fund this segment’s investment portfolio, both as discussed in the sections above.

During both the three months ended MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the weighted average unlevered yield on the Infrastructure Lending Segment’s loans and investment securities, excluding those for which interest income is not recognized, was 8.4% and 8.7%, respectively, primarily reflecting lower average index rates and lower prepayment related income in the first quarter of 2026.8.4%.

During both the three months ended MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the Infrastructure Lending Segment’s weighted average secured borrowing rate, inclusive of the amortization of deferred financing fees, werewas 6.2% and 6.8%, respectively, reflecting lower average index rates and spreads in the first quarter of 2026.6.2%.

For the three months ended MarchJune 31,30, 2026, other income of our Infrastructure Lending Segment decreasedincreased $0.5$2.0 million to $1.0$3.0 million, compared $1.5$1.0 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a $2.8$1.8 million decreaseincrease in earnings from unconsolidated entities, partially offset by a $1.9 million decrease in loss on extinguishment of debt.entities.

For the three months ended MarchJune 31,30, 2026, revenues of our Property Segment increased $3.5$2.9 million to $61.3$64.2 million, compared to $57.8$61.3 million for the three months ended DecemberMarch 31, 2025,2026, primarily due to Fundamental’s acquisition of additional net lease properties.

For the three months ended MarchJune 31,30, 2026, costs and expenses of our Property Segment increased $0.4$1.1 million to $72.2$73.3 million, compared to $71.8$72.2 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to an increase in depreciation and amortization of properties acquired by Fundamental, partially offset by a decrease in interest expense of the Medical Office Portfolio primarily due to repayment of its $39.5 million mezzanine debt in February 2026.Fundamental.

For the three months ended MarchJune 31,30, 2026, other income of our Property Segment decreased $26.1$2.4 million to $14.6$12.2 million compared to $40.7$14.6 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a $25.1$7.5 million decrease in income attributable to investments of the Woodstar Fund, primarily related to lower unrealized fair value increases.changes, partially offset by a $6.1 million increased gain on interest rate derivatives which primarily hedge the timing of securitizations on Fundamental collateral while on a warehouse line.

For the three months ended MarchJune 31,30, 2026, costs and expensesrevenues of our Investing and Servicing Segment decreased $2.9$28.1 million to $32.7$52.7 million, compared to $35.6$80.8 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a $2.5$31.1 million decrease in generalservicing and administrative expenses,fees principally related to lowerdefault severance costs and loan securitization activity.interest.

For the three months ended MarchJune 31,30, 2026, other income of our Investing and Servicing Segment decreasedincreased $20.6$13.4 million to $2.0$15.4 million, compared to $22.6$2.0 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to (i) the nonrecurrence of a $10.1$6.2 million gain on sale of an operating property in the fourth quarter of 2025, (ii) a $5.5 million greaterlesser decrease in fair value of CMBS investments andinvestments, (iiiii) a $4.9$4.3 million lessergreater increase in fair value of conduit loans.loans and (iii) a $2.3 million gain on sale of a foreclosed property in the second quarter of 2026.

For the three months ended June 30, 2026, corporate other loss increased $12.8 million to $34.2 million, compared to $21.4 million for the three months ended March 31, 2026, corporate other loss increased $13.0 million to $21.4 million, compared to $8.4 million for the three months ended December 31, 2025.2026. This was due to aan greaterincreased loss on our fixed-to-floating interest rate swaps which hedge a portion of our unsecured senior notes.

Income Tax Benefit (Provision) Benefit

Our consolidated income taxes principally relate to the taxable nature of our loan servicing and loan securitization businesses which are housed in taxable REIT subsidiaries (“TRSs”). For the three months ended MarchJune 31,30, 2026, our income tax provision decreasedincreased $22.8$10.1 million to a provision of $6.2 million compared to a benefit of $3.9 million compared to a provision of $18.9 million for the three months ended DecemberMarch 31, 2025.2026. This was primarily due to a provision on taxable income of our TRSs in the second quarter of 2026 compared to the tax benefit recognition of intra-entity asset transfers in the first quarter of 2026 compared to the fourth quarter of 2025 provision on taxable income of our TRSs.2026.

During the three months ended MarchJune 31,30, 2026, net income attributable to non-controlling interests decreasedincreased $10.0$2.9 million to $5.5$8.4 million, compared to $15.5$5.5 million during the three months ended DecemberMarch 31, 2025.2026. This was primarily due to non-controlling interests in ana unfavorablefavorable change in unrealized gains (losses) of a consolidated CMBS joint ventureventure, andpartially offset by lower income of the Woodstar Fund in the firstsecond quarter of 2026.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to the ThreeSix Months Ended MarchJune 31,30, 2025