APRIL 16, 2025
SREIT Highlights as of December 31, 2024 6.8% Annualized Net Return for Class I since inception in December 2018 1 5.7% Annualized Distribution Rate for Class I Share 2 5.1% Market Leading Same-Store Cash Flow Growth (Net Operating Income “NOI”) 3 100% of 2024 distributions characterized as Return of Capital (“ROC”) 4
Starwood Real Estate Income Trust (“SREIT”) 2024 Year-End Stockholder Letter
Dear SREIT Stockholder, 2024 Performance
Through year-end 2024, SREIT’s Class I shares have delivered an inception-to-date annualized return of +6.8%. Calendar year 2024 total return for the Class I shares was +0.2%. For the fifth consecutive year, 100% of SREIT’s distributions in 2024 were characterized as a Return of Capital (“ROC”) for federal income tax purposes. Our annualized distribution rate is 5.7% which equates to approximately 9.7% on a tax- equivalent basis for investors in the highest income tax bracket. Performance for the year was impacted by interest rates, both positively and negatively. Short-term interest rates (SOFR) declined with the Federal Reserve’s three rate cuts beginning in September. Lower rates, combined with a sense that the worst is behind us, led to lower credit spreads and overall borrowing costs. This helped to stabilize asset values. In fact, third-party valuations for SREIT’s portfolio were up in each of the last four quarters. The offset to lower short-term rates was a negative impact to the mark-to-market value of our interest rate hedges, which are in-place to protect distributable cash flow. Excluding these hedges, SREIT’s 2024 total net return would have been +2.4%, underscoring the positive direction of real estate values. Portfolio While rent growth slowed throughout the year due to elevated supply deliveries, fundamentals in SREIT’s portfolio remained solid with market leading +5.1% same- store cash flow (NOI) growth while maintaining 94% occupancy. Revenue growth in our two largest reporting segments (rental housing and industrial) outperformed the top 50 markets average by more than 3.0% on a combined basis. 5 This outperformance was primarily driven by our unique affordable housing portfolio within rental residential (which benefits from inflation and wage indexed rents) and allocation to in-fill, last mile and infrastructure centric industrial investments (which experienced lower levels of new supply growth). Bigger picture, supply/demand fundamentals for rental housing continue to benefit from an estimated four to five-million-unit shortfall and falling supply while industrial continues to benefit from the growth in e-commerce and the need to deliver products to consumers faster.
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SREIT | 2024 YEAR-END LETTER
FOR SREIT STOCKHOLDERS ONLY
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