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The real estate market is "collateral damage" in the Fed's inflation fight, Barry Sternlicht said. AdvertisementThe commercial real estate market is hurting, and that's largely thanks to the Federal Reserve's aggressive rate hikes which have battered the economy, real estate billionaire Barry Sternlicht said. In an interview on "In Depth with Graham Bensinger," the real estate investor and Starwood Capital CEO sounded off the Fed's policy-tightening campaign since early 2022. AdvertisementLast year, Sternlicht warned of a "Category 5 hurricane" coming for the real estate market, which he believed could be followed by a recession. Still, Sternlicht said he was optimistic about the real estate market going forward, and while property prices have plunged, that creates investment opportunity.
Persons: Barry Sternlicht, I've, Sternlicht, , Graham Bensinger, Morgan Stanley, Sternlict, Powell, Joe Biden Organizations: Starwood, Service, Starwood Capital CEO, Bloomberg, Fed, Wall, Infrastructure Investment, Investors
Read previewThe US commercial real estate market saw a steep drop in investment last year, with capital flows into the market plummeting by more than 50% to the lowest level since 2012. That brought the full-year investment total to $348 billion, a 52% decline from 2022, according to CBRE. CBRE noted a 91% year-over-year drop in direct real estate company investments to $1.4 billion in Q4, citing increased financing costs. New York took the lead with $33 billion in investment, followed by Los Angeles at $30 billion. AdvertisementThe dimming outlook for commercial real estate —offices in particular — is linked to the tighter financing conditions that many commercial landlords now face.
Persons: , CBRE, Barry Sternlicht Organizations: Service, Business, New York, Los, Starwood Capital, Capital Locations: Los Angeles
Billionaire Starwood CEO Barry Sternlicht sees losses on office properties hitting $1 trillion, per Bloomberg. Office values have plummeted as remote work proves to be a lasting legacy of the pandemic. AdvertisementThe ailing office market is headed for $1 trillion of losses, billionaire and Starwood Capital CEO Barry Sternlicht said. Per Bloomberg, Sternlicht said at the Global Alts conference in Miami Beach that US office properties, once a $3 trillion market, are worth about $1.8 trillion now. The cratering values have been the result of remote work being solidified as a lasting legacy of the COVID-19 era.
Persons: Barry Sternlicht, , Per, Sternlicht Organizations: Starwood, Bloomberg, Service, Starwood Capital, Per Bloomberg, Global, Business Locations: Miami Beach
The billionaire Starwood CEO predicted a coming recession and "Category 5 hurricane" in the real estate sector. download the app Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy PolicyA storm is headed for the real estate sector, and a recession is coming despite growing talk of a soft landing, according to real estate billionaire Barry Sternlicht. Higher rates and tighter financial conditions spell trouble for the real estate sector in particular. "I like to say there's a hurricane over real estate right now. While labor markets are hot still, inflation is steadily cooling, leading to talk of a Goldilocks scenario in which the Fed can lower inflation without crushing demand or crimping growth.
Persons: Barry Sternlicht, Sternlicht, David Rubenstein Organizations: Starwood, Service, Starwood Capital CEO, Bloomberg Wealth, Board Locations: Wall, Silicon
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailStarwood Capital CEO Barry Sternlicht: Labor force 'structurally hard' to kill with interest ratesBarry Sternlicht, Starwood Capital chairman and CEO and chairman of Starwood Property Trust, joins 'Squawk Box' to discuss the Fed's inflation fight, commercial real estate, market outlook, and more.
Persons: Barry Sternlicht Organizations: Starwood Capital, Labor, Starwood Property Trust
Inflation is going to drop hard, says Starwood Capital CEO
  + stars: | 2023-04-04 | by ( ) www.cnbc.com   time to read: 1 min
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInflation is going to drop hard, says Starwood Capital CEOBarry Sternlicht, Starwood Capital Group chairman and CEO, joins CNBC's 'Squawk Box' to discuss Sternlicht's reaction to Jamie Dimon's recent comments, the lag effect of rent growth, and more.
Starwood Capital CEO Barry Sternlicht said Tuesday that a severe economic downturn is inevitable. "I think we're going into a serious recession," Sternlicht said on CNBC's " Squawk Box ." However, Dimon said he believes that the U.S. might be able to skirt a recession. Sternlicht previously said he and his colleagues looked at six regional banks and studied their mark-to-market losses on assets. They know that this cannot last and we have the very low consumer confidence, very low savings rates, very low CEO confidence, and a series of layoffs coming through the service industries," Sternlicht said.
Barry Sternlicht warned Thursday that a sharp economic downturn is coming in the US. Jerome Powell "is using a steamroller to get the price of milk down two cents, to kill a small fly," Sternlicht said. "[Fed chair Jerome Powell] is using a steamroller to get the price of milk down two cents, to kill a small fly." "I think it's time we changed the conversation – there's good inflation and bad inflation," he told CNBC. "Good inflation is wage inflation."
Starwood Capital CEO Barry Sternlicht said the U.S. is headed into a recession because the Federal Reserve has been hiking interest rates too aggressively. "The economy will have a hard landing," Sternlicht said on CNBC's " Squawk Box " Thursday. The Fed and other regulators took emergency actions to safeguard depositors at the failed banks, but concerns still linger about a run on deposits at some regional banks. Sternlicht said he and his colleagues looked at six regional banks over the weekend and studied their mark-to-market losses on assets. "They didn't even stress test these banks if rates rose, so they should have been the first ones to see what they were doing to the regional banks," Sternlicht said.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe economy will have a hard landing from inflation: Starwood Capital CEO Barry SternlichtBarry Sternlicht, Starwood Capital Group chairman and CEO, joins CNBC's 'Squawk Box' to discuss his reaction to the Federal Reserve's decision to raise the federal funds rate, how the Federal Reserve is working to counter inflation, and more.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Starwood Capital CEO Barry SternlichtBarry Sternlicht, Starwood Capital Group chairman and CEO, joins CNBC's 'Squawk Box' to discuss the Federal Reserve's rate path, the country's murky labor picture, and more.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailStarwood Capital CEO Barry Sternlicht weighs in on the current labor marketBarry Sternlicht, Starwood Capital Group chairman and CEO, joins CNBC's 'Squawk Box' to discuss the Federal Reserve's rate path, the country's murky labor picture, and more.
In Starwood Capital CEO Barry Sternlicht's view, the Federal Reserve's ongoing interest rate hikes are driving the U.S. economy straight into a recession. During a session of CNBC's Financial Advisor Summit on Tuesday, Sternlicht said he thinks that an economic contraction will emerge next year and that Fed Chairman Jay Powell "will see that they blew it." "The economy is absolutely going into a recession, and it's absolutely definitive," Sternlicht told CNBC's Sara Eisen, who moderated the session. Right now, the 10-year Treasury bond is yielding roughly 3.6%, compared with the 2-year bond's yield of almost 4.4%. While inflation is a normal part of an economy, the current rate is far above the Federal Reserve's target of 2% over the long run.
Finding Opportunity In A High-Rate Environment
  + stars: | 2022-12-06 | by ( ) www.cnbc.com   time to read: 1 min
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFinding Opportunity In A High-Rate EnvironmentStarwood Capital CEO Barry Sternlicht has made no secret of his displeasure with Fed moves this year, taking aim at rising rates as a threat to capitalism itself. But he's also hinted there are opportunities to be had for savvy investors who know where to look. We'll kick off our summit by talking with the legendary investor about the prospect of a recession and the moves smart investors should be making now in order to avoid the worst of the storm.
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