Supplement dated August 17, 1998
to Proxy Statement/Prospectus dated May 14, 1998
The following information supplements and amends the Proxy
Statement/Prospectus, dated May 14, 1998, of Starwood Financial Trust (the
"Company") relating to the offer and sale from time to time by the Selling
Shareholders named therein of the Company's Class A Shares of beneficial
interest, $1.00 par value per share (the "Class A Shares"). This Supplement
should be read in conjunction with the Proxy Statement/Prospectus dated May 14,
1998. All terms not otherwise defined herein have the meanings ascribed to them
in the Proxy Statement/Prospectus dated May 14, 1998.
In order to update the information contained in the section entitled
"Selling Shareholders," the following table replaces the table in such section
in the Proxy Statement/Prospectus dated May 14, 1998:
<TABLE>
<CAPTION>
Shares Owned
Prior to the Offering
-----------------------------------------
Selling Shareholder Number of
New Class A Percentage Shares Being
Shares (1) of Class Offered (1)
--------------------- ------------------- -------------------
<S> <C> <C> <C>
Starwood Mezzanine Investors, L.P...................... 10,786,157 20.6% 10,786,157
SOFI-IV SMT Holdings, L.L.C............................ 41,179,133 78.6% 41,179,133
Starwood Financial Advisors, L.L.C..................... 2,493,842(2) 4.5% 2,493,842
The members and direct and indirect limited partners
of SOFI-IV SMT Holdings, L.L.C, Starwood 523,897(3) * 523,897(3)
Mezzanine Investors L.P. and SAHI Partners............
</TABLE>
- ------------------------------------
* Does not exceed 1% of the total outstanding New Class A Shares
(1) Reflects consummation of the Reorganization and exchange of the Class A
Shares for New Class A Shares at the Exchange Ratio.
(2) Issuable upon exercisable of options to purchase New Class A Shares. (3) To
be received upon potential distribution by SOFI-IV SMT Holdings, L.L.C.
