Starwood Property Trust, a real estate investment trust focused on originating, investing in and financing commercial mortgage loans, made a net loss of USD3m or USD0.06 per common share for the period from beginning operations on 17 August 2009 until 31 December 2009.

The company’s core loss was USD596,000 or USD0.01 per share.

The net interest margin generated from investments during the period was approximately USD5m.

Additional interest income earned from cash balances during the period was approximately USD1.7m.

The results were affected by the recognition of USD2.4m of non-cash, stock-based compensation in the period.

For the fourth quarter, core earnings were USD501,000 or USD0.01 per share, while the net loss was USD1.1m or USD0.02 per common share.

"We are encouraged by the company's current portfolio, with investments now approaching USD1bn in assets in less than six months, much of which occurred subsequent to year-end," says Barry Sternlicht (pictured), chairman and chief executive officer. "Our pipeline of transactions has begun to accelerate in quantity as the markets have evolved, and we believe meaningful opportunities for us will continue to develop as the credit markets improve. The markets do not yet need to replace the significant lending capacity that has exited the market, with transaction volume down in excess of 80 per cent year over year; this normalization process should provide a tremendous opportunity for us."

The company's GAAP book value per share at 31 December 2009 was USD18.66 and is net of the company's contingent underwriter's fee of USD27.2m. On a fully diluted basis, the company's GAAP book value at 31 December 2009 was USD18.26 per share.

Net investment during the fourth quarter totalled approximately USD258m; the investments included purchases of loans totalling approximately USD110m, newly originated first mortgages of USD105m, and purchases of single borrower CMBS totalling USD43m.

Net investments made since the commencement of operations through 31 December 2009 totalled approximately USD288m (including a minority interest of USD8m) and are expected to generate net returns of between 11 per cent and 16 per cent.