Starwood Property Trust, Inc. (NYSE: STWD) (the “Company” or “Starwood Property Trust”) announced that the Company has entered into a definitive agreement to acquire Fundamental Income Properties, LLC (“Fundamental”), a fully integrated net lease real estate operating platform and owned portfolio, for approximately $2.2 billion.
Fundamental, currently owned by Brookfield Asset Management, operates a vertically integrated net lease real estate investment business led by a best-in-class, experienced management team. The 28-person team, which will be employed by the Company, brings comprehensive capabilities across originations, credit and real estate underwriting, portfolio management, and capital markets. Fundamental executes its acquisitions through strong relationships with middle market companies and private equity sponsors across a variety of industries.
“When we went public in 2009, we said we would create a diversified company around the areas of expertise of our Manager, Starwood Capital. With the addition of another business cylinder, we are expanding into another proven, scalable segment with strong synergies with our platform. Our core commercial real estate lending business is now approximately half of our asset base as we have strategically expanded into complementary lending and investing verticals,” said Barry Sternlicht, Chairman and CEO of Starwood Property Trust. “This diversification has allowed us to weather cycles and deliver consistent earnings and dividends for our shareholders, who have earned an average of 10.8% per year on their investment since our formation as a blind pool in 2009. The acquisition of Fundamental marks the next evolution, but not the last, of our platform. The quality of the team, their robust structuring capabilities and deep credit focus align perfectly with our culture. While we have strong experience in the net lease sector, the scale and infrastructure of Fundamental provide us with the opportunity to significantly grow in this attractive asset class using our combined expertise.”
Jeffrey DiModica, President of Starwood Property Trust, added, “We are very fortunate to add such a successful, experienced and thoughtful team with deep industry relationships and a proven track record of success. With our combined relationships and global reach, we are poised to increase market share. With nearly 20-year leases, annual rent escalators and access to attractive proven ABS financing, the transaction highlights our safety focus. We anticipate this investment to be accretive to distributable earnings after giving effect to projected refinancing of existing debt and projected acquisition volume, and the impact of this accretion will grow as we deploy more capital at our targeted yields. We are pleased to welcome the Fundamental team to the Starwood family.”
“We are excited to join Starwood Property Trust and further scale our business as part of this best-in-class organization,” said Chris Burbach, CEO of Fundamental. “Our team has built a proven, credit-oriented origination process, supported by long-standing relationships across industries. Together with Starwood Property Trust’s real estate expertise, consistent access to capital, and a growing net lease market, we are well positioned to capitalize on compelling investment opportunities.”
Alexi Panagiotakopoulos, CIO of Fundamental, added, “We built our platform to meet the growing capital needs of middle market companies by providing efficient capital along with certainty of execution. Joining Starwood Property Trust enhances our abilities to help our current and future clients grow and improve their businesses.”
Starwood Property Trust (NYSE: STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm, Starwood Capital Group, the Company has successfully deployed $108 billion of capital since inception and manages a portfolio of $27.5 billion across debt and equity investments. Starwood Property Trust’s investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk-adjusted returning investments across its target assets.
The estimated financial results contained in this press release are preliminary, and final results for the three months ended June 30, 2025 may change. These preliminary results are based upon our estimates and are subject to completion of our quarterly financial closing procedures. In addition, these preliminary results have not been reviewed by our independent registered public accounting firm. This summary of recent results is not a comprehensive statement of our financial results for the three months ended June 30, 2025.
