Starwood Property Trust Inc.

officer. With that, I am now going to turn the call over to Rena.

Thank you, Zach, and good morning, everyone. This quarter once again demonstrated the strength of our diversified platform with distributable earnings, or DE, of $153 million, or 51 cents per share. We were active on both the left and right-hand sides of our balance sheet, deploying $3.1 billion of capital and completing securitizations within our commercial, residential, and infrastructure lending businesses. I will start this morning with commercial and residential lending, which contributed DE of $127 million to the quarter. In commercial lending, we originated $1.7 billion across 12 loans, $1.4 billion of which was funded. We also funded $149 million of pre-existing loan commitments. Repayments were $1.1 billion, with A-Note and Mezloan sales totaling $231 million. This brought our commercial lending portfolio to a record $11.5 billion at quarter end. Despite $3.6 billion of loan repayments and sales post-COVID, our portfolio has grown nearly 25% over the past year. Also in the quarter, we completed our second CRE CLO, which totaled $1.3 billion. The CLO is actively managed with a weighted average coupon of LIBOR plus 150 and an advance rate of 85%. allowing us to move a significant amount of our existing repo financing to a term-matched, non-recourse, non-mark-to-market structure. We continue to see strong credit performance in our loan portfolio, with a weighted average LTV of 61%. Over 80% of the repayments this quarter were in office and hotel, and our retail exposure remains low at 3%, with nearly all of this exposure in a single loan, which has a significant entertainment component. We continue to have 100% interest collections and less than 2% of our loans on non-accrual. On the CECL front, our general reserve declined by $12 million in the quarter to $48 million due to improved macroeconomic forecasts. To conclude my comments on commercial lending, we have discussed with you previously certain loans related to a residential project in New York City. The foreclosure of the condo units representing our collateral in those loans was formally completed this quarter. You will now find the entirety of the project reflected as property on our balance sheet. In connection with the foreclosure, we incurred transfer taxes, which reduced distributable EPS in the quarter by two cents. Our residential lending business was also active. In our loan portfolio, acquisitions totaled $663 million, and we completed our 11th and 12th securitizations, totaling $564 million. Of the loans we acquired this quarter, 172 million resulted from unwinding one of our 2019 securitizations. This will allow us to significantly reduce the financing cost of these loans upon resecuritization. Our loan portfolio ended the quarter with a balance of 637 million, a weighted average coupon of 5.2%, average LTV of 68%, and average FICO of 739. Our retained RMBS portfolio ended the quarter at $232 million after retaining bonds in our Q2 securitization, selling previously retained bonds, and accounting for the impact of elevated prepayments. Next, I will discuss our property segment, which contributed $20 million of distributable earnings to the quarter. The credit performance of this portfolio remains very strong, with rent collections at 98 percent weighted average occupancy steady at 97%, and blended cash-on-cash yields increasing to 18.5% this quarter. Next, I'll turn to investing and servicing, which reported DE of $48 million. Our conduit was very active with 542 million of loans securitized or priced in three transactions, two of which settled subsequent to quarter end. Consistent with past practice, the two transactions which priced in June but settled in July are treated as realized for DE purposes. Our next securitization is not expected to price until September, so we expect a lower contribution from this business in Q3. In special servicing, fees increased by 31% this quarter to $16 million, due primarily to COVID-related modification and liquidation fees. While the timing of such fees cannot be predicted with certainty, we expect to see at least some portion of COVID-related fees in earnings going forward. We also continue to focus on obtaining new servicing assignments. Subsequent to quarter end, we were named special servicer on 12 CMBS trusts with a balance of $12.2 billion, bringing our pro forma named servicing portfolio to $91.3 billion and our pro forma active servicing portfolio to $8.7 billion. And finally, on this segment's property portfolio. During the quarter, we sold an asset with a cost basis of $25 million for $30 million, resulting in a net DE gain of $5 million and a gap gain of $10 million. At quarter end, the undepreciated balance of this portfolio was $250 million across 14 investments. Concluding my business segment discussion today is infrastructure lending, which contributed DE of $8 million to the quarter. We acquired $168 million of new loans and funded $23 million under pre-existing loan commitments. Repayments were $85 million, which increased the portfolio to $1.8 billion. On the right-hand side of the balance sheet, we completed our inaugural $500 million infrastructure CLO, which provides a significant expansion of our credit capacity, along with a term-matched, non-recourse, non-mark-to-market structure. The CLO is actively managed with a weighted average coupon of LIBOR plus 181 basis points and an 82% advance rate. I will conclude this morning with a few comments about our liquidity and capitalization. In addition to the securitizations we completed in Q2, subsequent to quarter end, we securitized a $230 million extended stay hotel loan in our commercial lending portfolio at a 91% advance rate. This allowed us to generate excess liquidity while lowering our exposure to recourse debt. Also subsequent to quarter end, we issued a $400 million unsecured sustainability bond with a five-year term and a fixed coupon of three and five-eighths. The proceeds will be used to retire a portion of our December $700 million 5% unsecured notes when they open for prepayment at PAR in September. In addition to financing capacity available to us via the securitization market, we continue to have ample credit capacity across our businesses, ending the quarter with $8.3 billion of availability under our existing financing lines, unencumbered assets of $2.8 billion, and an adjusted debt to undepreciated equity ratio of 2.2 times. This credit capacity, in addition to our current liquidity of $1.3 billion, provides us with ample dry powder to repay our December unsecured note maturity and execute on our pipeline. With that, I'll turn the call over to Jeff for his comments.

Thanks, Rena. My comments this quarter will be relatively brief, highlighting another strong quarter of activity on both sides of our balance sheet. I'll start by discussing our capital markets activity during the quarter. As Rena said, we issued $400 million of unsecured sustainability bonds at a three and five-eighths coupon in July. which was the tightest priced five-year unsecured bond offering on record for a mortgage REIT. Our offering was over four times oversubscribed with $2.2 billion in orders. Today, our outstanding unsecured bonds trade in a secondary market that yields between 2.75% and 3.25%, which gives us the option to issue very accretive capital to grow the business or pay off the remainder of our 5% coupon bonds that mature in Q4. For the first time, we chose to engage Fitch to rate this transaction and received a BBB Plus corporate and bond rating from them. In rating us BBB Plus, Fitch cited the diversity of Starwood's business model, strong asset quality, consistent operating performance, relatively low leverage, appropriate interest coverage, a diverse and well-laddered funding profile, and solid liquidity. Given where our bonds trade, we believe the bond market concurs with this view. During the quarter, we also closed on our second CRE CLO, a $1.3 billion transaction, and our $500 million inaugural energy infrastructure CLO, and subsequent to quarter end, completed a $230 million SASB securitization on a well-performing limited service hotel portfolio in our CRE loan book. Along with selling ANOTE senior mortgages, these securitizations importantly reduce our percentage of secured debt subject to credit marks and recourse, which has continued to be well below 50% of our CRE financing and contributed significantly to our best-in-class liquidity in the depths of COVID. These transactions also significantly increase our returns on the equity in these transactions. Our CRE lending business continues to take advantage of the momentum we built over the last 17 months, investing in every segment in every quarter since COVID began. Rena mentioned we originated $1.7 billion of CRE loans in our commercial lending segments in Q2, and we are on pace to have a record origination year in 2021 and expect to do so by the fall. Commercial and residential real estate fundamentals continue to improve, asset prices continue to increase, and we believe our credit-first culture has led to credit outperformance in excess of the market's rebound. As we said on our Q1 earnings call, Our base case modeling today suggests we will have little to no losses on our loan book as a result of COVID, a statement none of our peers have made to date. We used our best-in-class financing to more than double our multifamily loan exposure over the past year. In that time, our office loan exposure as a percentage of our loan book is down 24%, our hotel exposure is down 11%, and our exposure to construction loans is down 61%. As our book has become less transitional, we've also cut our future funding exposure in half over the last 18 months. We've used the scale and footprint of Starwood Capital to consciously increase our international exposure by 42% since the start of COVID, and that book is now a record 27% of our lending portfolio. We expect to continue to increase our exposure to highly accretive international loan opportunities in the coming year. We are finding higher returns internationally versus the US where lending markets rebounded more quickly after COVID and where we often see more competition on loans. Our own property portfolio has benefited from lower cap rates and the significant liquidity in the real estate capital markets today. The unrealized gain on our property portfolio rose again this quarter to over $1.3 billion or approximately $4.50 per share. Florida multifamily has been one of the biggest beneficiaries of our country's southern migration, lower taxes, and growth. As a result of another cash-out refinancing we will execute imminently, we will have a negative basis in our Florida multifamily portfolio, which is conservatively worth well in excess of $2 billion today and accounts for over 80% of our property segment gains. I will remind you that rents cannot go down in this 99% leased portfolio and will continue to rise with median income in their specific MSAs, which are centered around Orlando and Tampa, two of the fastest growing MSAs in the country. These gains put us in the enviable position of being able to choose whether to harvest them to reinvest and grow earnings or retain them at a very accretive yield and ensure our unparalleled dividend coverage. I will finish by saying management and our board are proud of the way we set up our company to outperform in volatile markets. And we will use our credit first lens to continue to work diligently to find opportunities to continue to diversify our business. We have been in business for over 12 years and invested over $70 billion with only one basis point of realized CRE loan losses to date, which has helped lead to an industry best 13 plus percent annual return to shareholders since inception. With that, I'll turn the call to Barry.