Starwood Property Trust turns another profit in 4Q, full year 2010
Starwood Property Trust (STWD) swung to a profit for its fourth quarter as the company's portfolio of target investments reached $1.1 billion at Dec. 31 while generating a 11.4% levered return. The real estate investment trust earned $17.6 million, or 33 cents a share, for the quarter, up from a loss of $1.1 million, or 2 cents a share, a year earlier. Starwood Property said its fourth-quarter core earnings, which exclude items, was $20.2 million, or 37 cents a share. For the full year, income rose to $57 million, or $1.14 a share. The company said core earnings for 2010 were $67.2 million, or $1.34 a share. The company results are a continuation of improving earning reports. Starwood swung to a profit in 3Q 2010. "We are pleased with our accomplishments in our first full year in operation, having made over $1.6 billion of investments in 2010," said Chairman and CEO Barry Sternlicht. "The commercial real estate debt markets have improved considerably over the past year," he said. "This is a double edged sword. The availability of credit has enabled borrowers to find replacement financings at higher proceeds levels and lower interest rates than previously expected, allowing for an increasing number of financings that have resulted in the stabilization of property values across the globe." Starwood, following business suit of numerous REITs over the past few months, sold 23 million common shares during the quarter, reaping proceeds of some $435 million. The company used proceeds to originate or purchase mortgages, while also lowering debt and boosting reserves. Starwood increased its investment in residential mortgage-backed securities by $44 million during the fourth quarter. Starwood also named Stew Ward chief financial officer, replacing Jerome Silvey, who had been interim CFO since July. Ward held a similar post with SPT Management LLC, Starwood's external manager, since October. He founded Coastal Capital Partners LLC and also jointly managed Countrywide Financial's commercial real estate finance operations until September 2008. Write to Jason Philyaw.