GREENWICH, Conn. and PARAMUS, N.J., Oct. 22, 2012 /PRNewswire/ -- Starwood Property Trust (NYSE: STWD) and Starwood Capital Group (on behalf of Starwood Distressed Opportunity Fund IX) today announced the sale to Vornado Realty Trust (NYSE: VNO) of a 25 percent participation in both the first mortgage and mezzanine loan on 701 Seventh Avenue in the Times Square area of Manhattan. On October 16, 2012, Starwood Property Trust and Starwood Capital Group announced the co-origination of a $475 million first mortgage and mezzanine financing for the acquisition and redevelopment of a 10-story retail building located in Times Square. $375 million was funded at closing and $100 million will be funded upon reaching certain milestones during the transformation of the property. STWD, Starwood Distressed Opportunity Fund IX, and VNO have now funded $210.9 million, $70.3 million and $93.8 million, respectively, and each party will fund their pro rata share of any future fundings. Following the sale to Vornado, the Starwood entities retained the controlling position in both the first mortgage and mezzanine loans. The lenders intend to sell the first mortgage in the near term to increase their investment returns and retain the mezzanine loan. Following the completion of the sale, the existing lenders expect that the mezzanine loan will generate an IRR in excess of 14 percent before attributing value to the equity participation received in the transaction which could be material. About Starwood Property Trust, Inc. Starwood Property Trust, Inc. is focused on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities ("CMBS"), and other commercial real estate-related debt investments. Starwood Property Trust, Inc. also invests in residential mortgage-backed securities ("RMBS") and residential real estate owned, and may invest in non-performing loans, commercial properties subject to net leases and residential mortgage loans. The Company is externally managed and advised by SPT Management, LLC, an affiliate of Starwood Capital Group, and has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.