What to Buy: Starwood Property Trust (NYSE: STWD)

Why to Buy Now: Starwood Property is helmed by legendary real estate investor Barry Sternlicht, who perhaps is best known as the founder of Starwood Hotels & Resorts Worldwide (NYSE: HOT). He left the latter company in 2005 to return full-time to real estate investing, as part of his private investment company Starwood Capital Group.

Mr. Sternlicht is the ultimate opportunistic value investor. When financing for commercial real estate dried up in the wake of the Global Financial Crisis, Mr. Sternlicht launched Starwood Property to originate and invest in commercial real estate debt.

With the game-changing acquisition of commercial real estate mortgage servicer LNR last year, Starwood Property now has unparalleled intelligence about market conditions and pricing at a micro level. That should give Starwood the scale and competitive edge to help ensure that it dominates its niche.

At the same time, Starwood Property is attentive to risk and focused on paying a consistent, rising distribution. In fact, the real estate investment trust (REIT) boosted its latest payout by 4.3 percent, for a quarterly payout of $0.48 per unit. Based on the recent share price, the new distribution level offers a forward yield of 8.1 percent.

Buy Starwood Property Trust below 24.50.