with the investment allocation policy described above. Starwood Property Trust’s offering materials do not specify a date or time period at which it might be liquidated. One Other Starwood Account is an opportunistic and value-add joint venture with a state pension plan. The joint venture generally targets investments that may be sourced by either party and that do not fit within an existing Starwood sponsored vehicle. Both parties must agree to such investment. The potential investment is not limited by targeted returns. One Other Starwood Account invests primarily in stabilized, income-oriented commercial real estate in the United States and Western Europe. To the extent an investment satisfies the investment objectives of us and such Other Starwood Account on the same terms, we will have priority over such Other Starwood Account. One Other Starwood Account, a private real estate debt fund (“US Debt Fund”) focuses primarily on U.S.-based senior secured and mezzanine floating-rate commercial real estate loans that are generally not secured by core or core-plus real estate, and real- estate related securities. We do not expect to target the same commercial real estate loans as this vehicle, but to the extent that we do during the US Debt Fund’s commitment period, US Debt Fund will have priority with respect to such investment opportunity, which will result in fewer real estate debt opportunities being made available to us. One Other Starwood Account, a private real estate debt fund (“European Debt Fund”) generally targets performing debt investments related to properties in Europe. We do not expect to target the same commercial real estate loans as European Debt Fund, but to the extent that we do, European Debt Fund will have priority with respect to a minority portion of such European debt investment and, as such, will result in less of an investment opportunity being made available to us. Finally, one Other Starwood Account, which we refer to as the “Select Opportunistic Starwood Account,” invests in “opportunistic” real estate, real estate debt and real estate-related securities globally (which often are under-managed assets and with higher potential for equity appreciation) and has priority over us with respect to such investment opportunities. The priority granted to the Select Opportunistic Starwood Account will result in fewer investment opportunities being made available to us. Other than the priority rights described above, no Other Starwood Accounts have priority over us with respect to investment opportunities. However, Starwood Capital may in the future grant priority to additional Other Starwood Accounts. While the Advisor will seek to manage potential conflicts of interest in a fair and reasonable manner (subject to the priority rights described above) as required pursuant to our charter and the Advisory Agreement, the portfolio strategies employed by the Advisor, Starwood Capital or their affiliates in managing the Other Starwood Accounts could conflict with the strategies employed by the Advisor in managing our business and may adversely affect the marketability, exit strategy, prices and availability of the properties, securities and instruments in which we invest. The Advisor, Starwood Capital or their affiliates may also give advice to the Other Starwood Accounts that may differ from advice given to us even though their investment objectives or guidelines may be the same or similar to ours. The amount of performance-based compensation charged and management fees paid by us may be less than or exceed the amount of performance-based compensation charged or management fees paid by Other Starwood Accounts. Such variation may create an incentive for Starwood Capital to allocate a greater percentage of an investment opportunity to us or such Other Starwood Accounts, as the case may be. Our Advisor also has discretion to choose which of our properties to syndicate in the DST Program, which presents conflicts because our Advisor and the Dealer Manager earn fees from the DST Program. “Other Starwood Accounts” means investment funds, REITs, vehicles, accounts, products and other similar arrangements sponsored, advised or managed by Starwood Capital, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co- investment vehicles and other entities formed in connection with Starwood Capital or its affiliates side-by-side or additional general partner investments with respect thereto).
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