Alexi Panagiotakopoulos and Chris Burbach, co-founders of Fundamental Income Properties. Starwood Property Trust has agreed to acquire the Phoenix firm. (Credit: Fundamental Income)
PHOENIX (July 18, 2025) – Starwood Property Trust, Inc. (NYSE: STWD) has announced that it has entered into a definitive agreement to acquire Fundamental Income Properties, LLC (“Fundamental”)—a fully integrated net lease real estate platform currently owned by Brookfield Asset Management—for approximately $2.2 billion.
Fundamental Income Properties is based in Phoenix. This Valley-based firm, headquartered at 2425 E. Camelback Road, Suite 800, operates its vertically integrated net-lease platform from the Phoenix metro area. The transaction includes Fundamental’s operating platform and a diversified portfolio of 467 properties across 44 states.
The acquisition significantly expands Starwood’s presence in the global net lease market and is expected to be accretive to distributable earnings. Fundamental’s 28-person team will join Starwood, bringing deep expertise across origination, credit underwriting, capital markets, and portfolio management.
Portfolio Highlights:
- 467 properties totaling 12 million square feet
- 100% occupancy across 92 tenants and 56 industries
- 17-year weighted average lease term
- 2.2% average annual contractual rent escalations
- Zero credit losses since inception
“The acquisition of Fundamental represents the next evolution of our platform,” said Barry Sternlicht, Chairman and CEO of Starwood Property Trust. “It adds a scalable, high-quality net lease business that complements our diversified investment approach. With this addition, we strengthen our ability to deliver consistent earnings and long-term shareholder value.”
Jeffrey DiModica, President of Starwood Property Trust, added: “Fundamental’s long-term leases, proven ABS financing capabilities, and strong credit orientation make this platform an ideal fit. Together, we can grow market share and drive meaningful earnings accretion.”
Chris Burbach, CEO of Fundamental, commented: “We’re excited to join Starwood Property Trust and scale our proven platform within a world-class organization. With their global reach and capital strength, we’re well-positioned to unlock new investment opportunities.”
Strategic Benefits of the Transaction:
- Diversification & Predictable Returns: The portfolio delivers stable cash flows backed by durable leases and high tenant quality.
- Market Expansion: Establishes a scalable foothold in the large and fragmented net lease market.
- Enhanced Origination: Leverages Fundamental’s relationships with middle-market operators and private equity sponsors.
- Capital Markets Access: Opens pathways to efficient ABS financing solutions.
- REIT Leadership: Further solidifies Starwood’s position as a leading diversified REIT.
Starwood will assume approximately $1.3 billion of existing financing facilities, including $0.9 billion in ABS debt. The remaining purchase price will be funded through a combination of cash on hand and additional capital. The transaction is expected to close on or around July 23, 2025, subject to customary closing conditions.
Advisors:
- Starwood Property Trust: BofA Securities (Sole Financial Advisor)
- Brookfield Asset Management: Wells Fargo and Evercore (Financial Advisors)
Preliminary Q2 2025 Financial Results
For the quarter ended June 30, 2025, Starwood expects:
- GAAP earnings per diluted share: $0.36 to $0.38
- Distributable earnings per diluted share (non-GAAP): $0.42 to $0.44, including a $0.13/share realized loss on the sale of a foreclosed office asset in Houston
Other key metrics:
- Book value per share: $18.78 to $18.80 (GAAP), $19.64 to $19.66 (undepreciated)
- Investments: $3.2 billion in the quarter, including $1.9B in commercial lending
- Liquidity: $1.4 billion as of July 15, 2025
Dividend Declaration
The Board of Directors has declared an early dividend of $0.48 per share for Q3 2025. The dividend is payable on October 15, 2025, to shareholders of record as of September 30, 2025.
Starwood will release its full Q2 2025 financial results on Thursday, August 7, 2025, before the market opens.
Distributable Earnings is a non-GAAP measure used to evaluate REIT performance. A reconciliation to GAAP earnings is included in the full release.