Starwood Real Estate Income Trust, Inc. Notes to Consolidated Financial Statements
Redeemable Non-controlling Interests In connection with its performance participation interest, the Special Limited Partner holds Class I units in the Operating Partnership. See Note 12 for further details of the Special Limited Partner’s performance participation interest. Because the Special Limited Partner has the ability to redeem its Class I units for cash, at its election, the Company has classified these Class I units as Redeemable non-controlling interest in mezzanine equity on the Company’s Consolidated Balance Sheets. The redeemable non-controlling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and distributions, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period. In addition to the Special Limited Partner’s interest noted above, certain third parties also have a redeemable non-controlling interest. The following table details the redeemable non-controlling interests activity related to the Special Limited Partner and third-party Operating Partnership unitholders for the years ended December 31, 2024 and 2023 ($ in thousands):
Third-party Operating Partnership unitholders
Special Limited Partner (1)
Total
Balance at December 31, 2022
$
238,322 $
188,777 $
427,099
Settlement of performance participation allocation
102,348
— 102,348
Repurchases
—
(620)
(620)
GAAP loss allocation
(18,753) (16,065) (10,160)
(10,412) (8,895) (4,680)
(29,165) (24,960) (14,840) 459,862 (1,144) (36,097) (24,900) 37,157 — 434,878
Distributions
Fair value allocation
Balance at December 31, 2023
$
295,692 $
164,170 $
Settlement of performance participation allocation
— —
—
Conversion to Class I shares GAAP loss allocation
(1,144) (12,791) (8,835) 12,606
(23,306) (16,065) 24,551
Distributions
Fair value allocation
Balance at December 31, 2024
$
280,872 $
154,006 $
__________ (1)
Includes units transferred to Barry S. Sternlicht, which are deemed to be beneficially owned by Mr. Sternlicht.
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