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Starwood's Sternlicht Opens Up at Real Estate Conference

CEO Blasts Lawmakers, Tells Attendees to Embrace Change
February 12, 2018
Starwood Capital Group CEO Barry Sternlicht addressed a variety of topics in a discussion with PGIM Real Estate executive Cathy Marcus at the University of Miami Real Estate Impact Conference.
Credit: University of Miami.

Barry Sternlicht, chairman and CEO of Starwood Capital Group, is not bashful in big groups.

Sternlicht weighed in on a number of topics during last Friday's University of Miami's Real Estate Impact Conference in front of several hundred people. He even dropped an f-bomb in chastising lawmakers for passing a $300 billion spending bill after agreeing to tax reform, calling the deficit spending irresponsible and blaming it as the source of recent stock market volatility.

"This is going to overheat the economy," he said. "(Interest) rates are going to go up. How fast they go up, no one knows for sure right now."

During an hour-long discussion with PGIM Real Estate executive Cathy Marcus to kick off the conference, Sternlicht urged the crowd of brokers, developers and students to embrace change.

"My goal is to not be Kodak," Sternlicht said. "How did Kodak miss the digital film revolution?"

In other observations during the annual real estate conference, Sternlicht said:

» On micro-unit condominiums: "I wouldn't want to be living in a shoebox," he said, before conceding they are necessary in areas with high housing costs.

» On Airbnb: "It's a very powerful company," but he added that hotels aren't going away.

» On retailing: Starwood owns 23 malls. "I'd be lying if I said I wanted to own them," he said, noting that some shopping centers will survive while other will be reinvented or repurposed to include apartments and hotels nearby. "The kids don't shop the way they used to. It's going to be very capital intensive to get from here to there. Where equilibrium is, I don't know."

» While Amazon is the industry titan, he said the company better keep an eye on Walmart, which he believes has the cash and resources to go head-to-head with Amazon.

» Businesses "were beaten up" during the Obama administration and they stand a better chance during Trump's presidency, he said. "As a business guy, (I) want him to be successful."

» On Florida: "It has a lot going for it. I like this state. I wish it had more hills, but I'll deal with it."

Sternlicht launched Starwood in 1991 and has overseen approximately $92 billion in investments. The firm has invested in roughly 172,500 multifamily and condo units; 2,900 hotels; 74 million square feet of offices; 54 million square feet of retail and 52,000 residential land lots.

He also is chairman of Starwood Property Trust (NYSE: STWD), one of the nation's largest commercial mortgage real estate investment trusts. Last month, the REIT said it has agreed to buy 28 affordable housing properties across Florida for $600 million in an off-market transaction.

Paul Owers, South Florida Market Reporter  CoStar Group   
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