Top 5 Beaten-Down REITs Ready for a Rotation Rally

In this article, we will list the Top 5 Beaten-Down REITs Ready for a Rotation Rally. Please visit Top 12 Beaten-Down REITs Ready for a Rotation Rally if you would like to see the extended list and the methodology behind it.

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

Number of Hedge Fund Holders: 28

Year-To-Date Performance: -8.66%

Stock Upside: 21.58%

Starwood Property Trust, Inc. (NYSE:STWD) is one of the top beaten-down REITs ready for a rotation rally. On June 16, Starwood Property Trust, Inc. (NYSE:STWD) announced that its board of directors had declared a dividend of $0.48 per share of common stock. The payment covers the second quarter, which is the period ending June 30, 2026, and will be distributed on July 15 to stockholders of record as of the last day of June.

g0d4ather / shutterstock.com

The $0.48 payment means the payout is unchanged from the prior quarter, and it marks more than ten consecutive years in which Starwood has held its dividend steady at this level. As of this writing, the payout equates to an annualized yield of roughly 11.4 percent, which is one of the higher yields among commercial mortgage REITs.

Starwood’s management proposed the dividend payment when releasing the Q1 FY2026 earnings on May 8. Management said during the earnings call that the $0.48 per share payout is sustainable and will eventually be fully covered by recurring distributable earnings (DE), even though Q1 FY2026 DE of $0.39 per share fell short of that target.

CFO Rina Paniry explained that the quarter’s reported DE was depressed by elevated cash balances (cash drag), the dilutive ramp-up of the newly acquired net lease platform, and costs tied to resolving non-performing assets. She noted that adjusting for these one-time drags, the DE would have been closer to $0.47 per share; just shy of the $0.48 dividend.

Starwood Property Trust, Inc. (NYSE:STWD) is a real estate investment trust. It originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, mezzanine loans, preferred equity, and commercial mortgage-backed securities. The company also originates and manages infrastructure debt investments, acquires and manages equity interests in stabilized commercial real estate properties, and manages problem assets, acquires CMBS, and originates conduit loans for securitization.