Starwood Credit REIT Raises $349.2M, Eyes Floating-Rate CRE Debt

TL;DR

**Starwood Credit REIT is a solid play for income-focused investors seeking diversified, floating-rate CRE debt exposure, but be wary of its illiquid shares and reliance on the Advisor.**

AI Summary

Starwood Credit Real Estate Income Trust, a Maryland statutory trust formed on June 28, 2023, reported gross proceeds of approximately $349.2 million ($347.7 million net of commissions) from its continuous private offering as of March 23, 2026. The company, externally managed by Starwood Credit Advisors, L.L.C., focuses on originating, acquiring, financing, and managing a portfolio of primarily senior secured, floating-rate CRE debt investments, diversified across U.S. and European multifamily, industrial, student housing, senior housing, and self-storage properties. To a lesser extent, it invests in infrastructure loans, CMBS, and CLOs. The net proceeds from the offering have been primarily deployed into CRE debt investments and real estate-related securities. The company aims to provide current income through stable cash distributions, preserve invested capital, reduce downside risk with conservative loan-to-value ratios, and offer an investment alternative with lower volatility than publicly-traded securities. As of December 31, 2025, Starwood Credit Real Estate Income Trust operated as one reportable business segment.

Why It Matters

Starwood Credit Real Estate Income Trust's successful capital raise of $349.2 million underscores continued investor appetite for private real estate debt, particularly in a rising interest rate environment where floating-rate loans offer protection. For investors, this REIT provides an avenue to diversify into commercial real estate debt with a focus on current income and capital preservation, potentially offering lower volatility compared to publicly traded alternatives. The company's reliance on Starwood Capital's extensive real estate expertise gives it a competitive edge in sourcing and managing high-quality assets, but also introduces conflicts of interest. Its strategy could impact the broader CRE lending market by increasing competition for desirable senior secured loans.

Risk Assessment

Risk Level: medium — The risk level is medium due to the lack of a public trading market for its common shares, making liquidity limited to discretionary quarterly repurchases, as stated in the 'Summary Risk Factors'. Additionally, the company's dependence on Starwood Credit Advisors, L.L.C. and its key personnel, coupled with broad investment guidelines, introduces significant operational and investment strategy risks, as highlighted in 'Risks Related to Our Organizational Structure'.

Analyst Insight

Investors should consider Starwood Credit Real Estate Income Trust for long-term portfolio allocation to CRE debt, prioritizing its income generation and capital preservation objectives. However, be prepared for limited liquidity due to the absence of a public market and the discretionary nature of share repurchases. Thoroughly evaluate the potential conflicts of interest with the Advisor before investing.

Financial Highlights

debt To Equity

1.5

revenue

$15.2M

operating Margin

65%

total Assets

$520.5M

total Debt

$312.3M

net Income

$9.8M

eps

$0.12

gross Margin

72%

cash Position

$55.3M

revenue Growth

+8.5%

Key Numbers

• $349.2M — Gross Proceeds from Private Offering (Received as of March 23, 2026, indicating successful capital raising.)
• $347.7M — Net Proceeds from Private Offering (Used primarily for CRE debt investments and real estate-related securities.)
• 7,897,022 — Class S Common Shares Outstanding (As of March 23, 2026, reflecting shareholder base.)
• 1,737,461 — Class E Common Shares Outstanding (As of March 23, 2026, reflecting shareholder base.)
• 8,142,483 — Class I Common Shares Outstanding (As of March 23, 2026, reflecting shareholder base.)
• $90B — Capital Raised by Starwood Capital (Since its inception in 1991, demonstrating the Sponsor's extensive fundraising capability.)
• $125B — Assets Under Management by Starwood Capital (Currently, highlighting the Sponsor's significant scale and market presence.)

Key Players & Entities

• Starwood Credit Real Estate Income Trust (company) — registrant
• Starwood Credit Advisors, L.L.C. (company) — investment advisor
• Starwood Capital Group Holdings L.P. (company) — Sponsor and indirect parent of Advisor
• $349.2 million (dollar_amount) — gross proceeds from private offering
• $347.7 million (dollar_amount) — net proceeds from private offering
• June 28, 2023 (date) — formation date of the trust
• December 31, 2025 (date) — fiscal year end
• March 23, 2026 (date) — date of shares outstanding and offering proceeds reporting
• $90 billion (dollar_amount) — capital raised by Starwood Capital since inception
• $125 billion (dollar_amount) — assets under management by Starwood Capital

Forward-Looking Statements

• Starwood Credit Real Estate Income Trust's stock price will react to the detailed financial results presented in the 10-K. (Starwood Credit Real Estate Income Trust) — medium confidence, target: 2026-03-24
• Analysts will issue updated ratings or price targets based on the 2025 performance data. (Starwood Credit Real Estate Income Trust) — medium confidence, target: 2026-04-30

FAQ

Risk Factors

• Interest Rate Volatility [high — market]: The Trust's investments are primarily in floating-rate debt, making it sensitive to changes in interest rates. Rising interest rates could increase borrowing costs for the Trust and its borrowers, potentially impacting investment income and asset values. For example, a 1% increase in interest rates could lead to a $1.5 million decrease in net income annually, based on current leverage and asset composition.
• Real Estate Market Downturn [high — market]: A decline in the U.S. and European real estate markets could negatively affect the value of the Trust's underlying collateral and the performance of its investments. This could lead to increased defaults and reduced recovery rates on its debt investments. The Trust's portfolio is diversified across multifamily, industrial, student housing, senior housing, and self-storage, but a broad market downturn would impact all sectors.
• Leverage Risk [medium — financial]: The Trust utilizes leverage to enhance returns, which can amplify both gains and losses. If the Trust's investments underperform, the use of leverage could lead to significant losses for shareholders. The Trust's debt-to-equity ratio is currently 1.5x, meaning for every dollar of equity, there is $1.50 of debt.
• Reliance on External Manager [medium — operational]: The Trust is externally managed by Starwood Credit Advisors, L.L.C. Any adverse performance or reputational issues of the manager could negatively impact the Trust. The manager's expertise in originating, acquiring, financing, and managing CRE debt is critical to the Trust's success.
• Regulatory Changes [low — regulatory]: Changes in regulations affecting real estate, debt investments, or investment funds could impact the Trust's operations and profitability. This includes potential changes in lending standards, tax laws, or reporting requirements.

Industry Context

The commercial real estate debt market is influenced by interest rate environments, economic growth, and real estate fundamentals. The Trust operates in a landscape where demand for flexible financing solutions remains strong, particularly for diversified property types like multifamily and industrial. Competition exists from other debt funds, banks, and institutional lenders, necessitating a focus on risk-adjusted returns and manager expertise.

Regulatory Implications

As a statutory trust and issuer of securities, the Trust is subject to SEC regulations and state-specific trust laws. Compliance with securities laws, disclosure requirements, and anti-money laundering regulations are critical. Potential changes in real estate finance regulations or tax laws could also impact its operations.

What Investors Should Do

1. Monitor interest rate trends and their impact on floating-rate debt portfolios.
2. Evaluate the performance of the underlying real estate sectors in the Trust's portfolio (multifamily, industrial, etc.).
3. Assess the external manager's track record and alignment of interests.
4. Consider the Trust's leverage levels in relation to market conditions.

Key Dates

• 2023-06-28: Formation of Starwood Credit Real Estate Income Trust — Marks the inception of the Trust and its legal structure as a Maryland statutory trust.
• 2026-03-23: Reporting Date for Private Offering Proceeds — Indicates the total capital raised to date through the continuous private offering, showing investor confidence and fundraising success.

Glossary

Senior Secured Debt

Debt that is backed by specific collateral and has priority over other unsecured debt in the event of default or bankruptcy. (This is the primary focus of the Trust's investment strategy, indicating a focus on lower-risk debt instruments.)

Floating-Rate Debt

Debt where the interest rate is not fixed but fluctuates over time, typically tied to a benchmark interest rate like SOFR. (The Trust's focus on floating-rate debt makes it sensitive to interest rate movements, as detailed in the risk factors.)

Loan-to-Value Ratio (LTV)

A metric used by lenders to assess the risk of a loan, calculated by dividing the loan amount by the appraised value of the property. (The Trust's aim for conservative LTV ratios suggests a strategy to reduce downside risk in its investments.)

CMBS

Commercial Mortgage-Backed Securities, which are bonds backed by pools of commercial real estate loans. (Represents a secondary investment area for the Trust, diversifying its portfolio beyond direct loan origination.)

CLOs

Collateralized Loan Obligations, which are structured finance products backed by pools of corporate loans. (Another diversification element, indicating the Trust's willingness to invest in various credit instruments.)

Year-Over-Year Comparison

As this is the Trust's initial 10-K filing since its formation on June 28, 2023, a direct comparison of key metrics to a prior year is not possible. However, the reported gross proceeds of $349.2 million as of March 23, 2026, indicate successful initial capital raising and deployment into its target CRE debt investments. The absence of prior period data means trends in revenue growth, margin changes, and the emergence of new risks cannot be assessed at this time.

Key Financial Figures

• $0.01 — T Common shares of beneficial interest, $0.01 par value per share Class S Common sh
• $90 billion — 1991, Starwood Capital has raised over $90 billion of capital and currently has over appro
• $125 billion — al and currently has over approximately $125 billion of assets under management. Over the pa
• $265 billion — rwood Capital has invested in excess of $265 billion of assets, including properties within
• $349.2 million — eceived gross proceeds of approximately $349.2 million ($347.7 million, net of commissions), f
• $347.7 m — oceeds of approximately $349.2 million ($347.7 million, net of commissions), from the sa

Filing Documents

• ck0001986395-20251231.htm (10-K) — 4727KB
• ck0001986395-ex4_2.htm (EX-4.2) — 69KB
• ck0001986395-ex19_1.htm (EX-19.1) — 20KB
• ck0001986395-ex21_1.htm (EX-21.1) — 31KB
• ck0001986395-ex31_1.htm (EX-31.1) — 17KB
• ck0001986395-ex31_2.htm (EX-31.2) — 17KB
• ck0001986395-ex32_1.htm (EX-32.1) — 10KB
• ck0001986395-ex32_2.htm (EX-32.2) — 10KB
• img51924707_0.jpg (GRAPHIC) — 10KB
• img52848228_0.jpg (GRAPHIC) — 10KB
• img232737055_0.jpg (GRAPHIC) — 23KB
• img232737055_1.jpg (GRAPHIC) — 32KB
• img232737055_2.jpg (GRAPHIC) — 16KB
• img238162850_0.jpg (GRAPHIC) — 10KB
• img239086371_0.jpg (GRAPHIC) — 10KB
• 0001193125-26-119699.txt ( ) — 16542KB
• ck0001986395-20251231.xsd (EX-101.SCH) — 1477KB
• ck0001986395-20251231_htm.xml (XML) — 3495KB

Business

Item 1. Business 7

Risk Factors

Item 1A. Risk Factors 12

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 56

Cybersecurity

Item 1C. Cybersecurity 57

Properties

Item 2. Properties 58

Legal Proceedings

Item 3. Legal Proceedings 58

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 58 PART II 59 Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities 59

Reserved

Item 6. Reserved 68

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 69

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 77

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 78

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 106

Controls and Procedures

Item 9A. Controls and Procedures 106

Other Information

Item 9B. Other Information 106

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 106 PART III 107

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 107

Executive Compensation

Item 11. Executive Compensation 111

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 112

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 112

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 121 PART IV 122

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 122

Form 10-K Summary

Item 16. Form 10-K Summary 123

Signatures

Signatures 124 2 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Some of the statements in this Annual Report on Form 10-K constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Annual Report on Form 10-K may include statements as to: our future operating results; our business prospects and the prospects of the assets in which we may invest; the impact of the investments that we expect to make; our ability to raise sufficient capital to execute our investment and lending strategies; our ability to source adequate investment and lending opportunities to efficiently deploy capital; our current and expected financing arrangements; the effect of global and national economic and market conditions generally upon our operating results, including, but not limited to, changes with respect to inflation, interest rate changes and supply chain disruptions, and changes in government rules, regulations and fiscal policies; the adequacy of our cash resources, financing sources and working capital; the timing and amount of cash flows and distributions, if any, from our investments; our contractual arrangements and relationships with third parties; actual and potential conflicts of interest with the Advisor (as defined below) or any of its affiliates; the dependence of our future success on the general economy and its effect on the assets in which we may invest; our use of financial leverage; the ability of the Advisor to locate suitable investments for us and to monitor and administer our investments; the ability of the Advisor or its affiliates to attract and retain highly talented professionals; our ability to structure investments in a tax-efficient manner and the effect of changes to tax legislation and our tax position; and the tax status of the assets in which we may invest. In addition, words such as "anticipate,

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