Starwood Property Trust,Inc. (NYSE:STWD) Files An 8-K Other Events

Medical Office Portfolio and Acquisition Credit
Facility

On September30, 2016, SPT Ivey Holdings, LLC (Holdings) (a
newly-formed, indirect wholly-owned subsidiary of the Company)
entered into a purchase and sale agreement with the sellers
named therein to acquire a stabilized portfolio of 38 medical
office buildings which are geographically dispersed throughout
the U.S. and primarily affiliated with major hospitals or
located on or adjacent to major hospital campuses (the Medical
Office Portfolio). The aggregate purchase price for the Medical
Office Portfolio, which collectively comprises approximately
2.2 million square feet, is approximately $837.9 million
assuming the full portfolio is acquired. The Medical Office
Portfolio is 95% occupied and carries a weighted average
remaining lease term of seven years. Although the precise
timing has not been determined, it is currently anticipated
that the acquisition may close in one or more stages in
December2016 and/or early 2017, subject to various closing
conditions. In October2016, the Company funded a $40.0 million
deposit associated with this acquisition.

The Company is in negotiations for Holdings and its property
owning subsidiaries to enter into a credit agreement (the
Acquisition Credit Agreement) for an up to $579 million
five-year secured term loan facility. The Company anticipates
that borrowings under the Acquisition Credit Agreement would be
secured by mortgages on the Medical Office Portfolio and
guaranteed by the Company to a customary bad boy non-recourse
carve out guaranty and by Holdings to a customary full payment
guaranty. In addition, the Company anticipates that the
Acquisition Credit Agreement will contain covenants,
representations and warranties and events of default customary
for borrowings of this type. If the Company enters into the
Acquisition Credit Agreement, it intends to use the proceeds of
the loans thereunder primarily to purchase the Medical Office
Portfolio, to pay transaction fees incurred in connection with
the Medical Office Portfolio and to finance tenant improvements
and leasing commissions in connection with the Medical Office
Portfolio.

The Company expects to enter into the Acquisition Credit
Agreement contemporaneously with the closing or closings of the
acquisition of the Medical Office Portfolio. However, acquiring
the Medical Office Portfolio and entering into the Acquisition
Credit Agreement are subject to uncertainties, many of which
are not within the Companys control. There can be no assurance
that the Company will acquire the Medical Office Portfolio or
enter into the Acquisition Credit Agreement on the terms or
within the time frame described, in its entirety or at all.

Additional Risk Factor

The following risk factor is provided to update the risk
factors of the Company previously disclosed in its periodic
reports filed with the Securities and Exchange Commission,
including its Annual Report on Form10-K for the year ended
December31, 2015 and its Quarterly Report on Form10-Q for the
quarter ended June30, 2016:

If we acquire the Medical Office Portfolio, we
would be subject to the general risks of owning properties
relating to the healthcare industry.

If we acquire the Medical Office Portfolio, the economic
performance and value of the properties in the portfolio and of
some or all of the tenants/operators of such properties could
be adversely affected by many factors that are generally
applicable to properties relating to the healthcare industry,
including the following:

adverse trends in healthcare provider operations, such as
changes in the demand for and methods of delivering healthcare
services, changes in third-party reimbursement policies,
significant unused capacity in certain areas, which has created
substantial competition for patients among healthcare providers
in those areas, increased expense for uninsured patients,
increased competition among healthcare providers, increased
liability insurance expense, continued pressure by private and
governmental payors to reduce payments to providers of services
and increased scrutiny of billing, referral and other practices
by federal and state authorities and private insurers;

extensive healthcare regulation, changes in enforcement
policies with respect to such regulation and potential changes
in the regulatory framework of the healthcare industry; and

significant legal actions brought against tenants/operators
that could subject them to increased operating costs and
substantial uninsured liabilities.

Other

As of September30, 2016, the Company had approximately $1.2
billion of total unencumbered assets, and, as of the same date,
on a pro forma basis after giving effect to (1)the issuance and
sale of the Notes in the Offering, (2)the use of net proceeds
from the Offering and from certain of the term loan borrowings
the Company plans to make under the expected New Credit
Agreement upon the completion of the Offering and entering into
the New Credit Agreement to repay in full the Existing Term
Loan and (3)the other term loan borrowings the Company plans to
make under the expected New Credit Agreement upon the
completion of the Offering and entering into the New Credit
Agreement, the Company would have had approximately $3.3
billion of total unencumbered assets.

Item 9.01. Financial Statements and
Exhibits.

(d) Exhibit