8 Most Undervalued REIT Stocks To Buy Now

5. Starwood Property Trust, Inc. (NYSE:STWD)

Number of Hedge Fund Holders: 25

Forward P/E: 9.84

Starwood Property Trust, Inc. (NYSE:STWD) is an affiliate of the global private investment firm Starwood Capital Group. The firm was established when Starwood Capital witnessed a need for alternative commercial mortgage financings since traditional commercial lenders left amidst the financial crisis. Starwood Property Trust has expanded since then and currently qualifies as the largest commercial mortgage REIT in the United States. The firm has been organized into complementary business segments including real estate lending, real estate investing and servicing, property, and infrastructure lending.

Starwood Property Trust, Inc. (NYSE:STWD) has a distinct position in the global real estate finance market as one of the world’s leading diversified real estate finance companies. The REIT has navigated multiple real estate cycles and has deployed more than $98 billion of capital since its inception, as of June 30. With the average size of its loans being approximately $100 million since inception, the scale of the firm is clear. Since Starwood Capital Group is one of the largest institutional real estate investors globally, Starwood Property Trust takes advantage of its global reach.

Since the firm has been diversified into investment cylinders other than commercial lending, it has outperformed in a relatively challenging global property market. However, the management believes that the hard phase is behind them, with an easing US and Europe market to be seen in the future. The firm’s access to capital and liquidity has further allowed it to invest across its businesses consistently.

Starwood Property Trust, Inc. (NYSE:STWD) is in an attractive spot with more than $4 per share of embedded gains in its owned property portfolio as well as $1.2 billion of liquidity. Since the firm’s founding 15 years back, it has also delivered a consistent dividend and an over 10% annualized return.