Barry Sternlicht

From the August issue: Barry Sternlicht started his company, Starwood Capital Group, during a downturn — and recently he’s been expanding it, especially here in New York.

Since the beginning of the year, Sternlicht, the firm’s chairman, has been ramping up his Manhattan deal-making.

The brains behind the iconic “W”brand, he’s picked up a slew of Manhattan properties in the last few months, including 1414 Avenue of the Americas, and the former Donnell Library on West 53rd Street, among others.

While Sternlicht has been one of the most active real estate players of the downturn, the focus on New York marks a shift from 2009 and 2010, when he concentrated on distressed properties in other parts of the country. Notable was his company’s 2009 deal to buy a 40 percent stake in Corus Bank’s distressed loan portfolio for $554 million after the lender was shut down by regulators. [more]

From left: Steven Spinola, president of the REBNY; Eric Anton, executive managing director at Eastern Consolidated; Debra Shultz, managing director at Manhattan Mortgage; David Heiden, a principal at W Financial and Barry Sternlicht, chairman and CEO of Starwood Capital Group

As the debt ceiling debate nears a critical juncture in Washington D.C., real estate executives in New
York are concerned that absent a final resolution, the fragile recovery will be short circuited by a sudden
spike in interest rates.

Steven Spinola, president of the Real Estate Board of New York, the 12,000-member trade organization,
said the industry’s main concern is the impact a debt ceiling default could have on projects financed
with tax exempt bonds.

“If there is no agreement and our credit rating goes down, what will that do to interest rates?” Spinola
said. [more]

Crexus Investment Group said yesterday evening that it rejected an unsolicited $254 million acquisition offer by Starwood Property Trust. In the late afternoon yesterday, Starwood made the $14-a-share-offer to acquire Crexus, a Manhattan-based real estate investment trust. The Starwood offer was contingent on Crexus suspending its previously announced offer to buy $586 million in real estate assets from Barclays Capital Real Estate Finance. Crexus planned to launch an initial public offering of $50 million shares of common stock, which would be used to finance the acquisition of the Barclays assets. [more]

From the February issue: While activity remains sluggish in the New York real estate market,
there may be pockets of opportunities for profits over the next few
years for those who invest wisely.
Experts point to three areas for investors looking to lay the
groundwork for a future fortune: office towers, land and multifamily
buildings.
First, a warning or two. Many of the properties sold will go to
insiders rather than victors in a public auction process. With few
assets available for cheap prices through public listings, “smart money
will use alternative paths to get to core real estate,” said Dan
Fasulo, managing director at Real Capital Analytics.
While there will be “opportunities to pick up quality assets at
attractive prices over the next year,” he warned that “investors who
feel like we’re going to fall off a cliff … will be greatly
disappointed.” [more]

In a segment called “How I Built It,” Barry Sternlicht talked to the Wall Street Journal about how he founded Starwood Capital, the real estate investment firm that founded Starwood Hotels and Resorts and, subsequently, the W Hotels brand, which includes W Union Square – New York, and the Westin Hotels line. “I borrowed money from friends and invested what I had… and I borrowed a million dollars, which is a lot when you’re 31 and have a net worth of about $100,000,” Sternlicht said.

After closing a blockbuster deal to relocate Starwood Hotels & Resorts from its White Plains headquarters to Stamford, Conn., outgoing Stamford Mayor Dan Malloy said the deal may be the first of several announcements over the next few weeks.

“We have deals that could be announced literally any day,” Malloy told The Real Deal.

Connecticut Governor M. Jodi Rell said this week that Starwood signed to relocate its corporate headquarters to a 250,000-square-foot space at Stamford’s new Harbor Point development at 333 Ludlow Street by January 2012. Starwood will team up with its new landlord, Building and Land Technology, to renovate the new space at a price of $40 million.

Starwood will save 20 percent in rent at its new headquarters, but officials declined to comment on specific prices. Existing tenants at the site include Deloitte & Touche and Pitney Bowes. According to a second-quarter report by Cushman & Wakefield, the average asking rent for Class A office space was $48.36 per square foot in downtown Stamford and $38.71 per square foot in the rest of the city. [more]

While it’s bad enough that the boom days of commercial real estate are over, Barry Sternlicht argues that investors are stuck with their tail between their legs in the wake of the market crash. The Starwood Capital CEO talked with CNBC’s Maria Bartiromo about navigating the market downturn, saying that investors today are more conservative — and sheepish — than they were just a few years ago. “People are doing things today because they’re a little embarrassed about what they did before, so they need money to restructure,” Sternlicht said. But Starwood could be in a position to help save face. “We’re focused on lending money… and we’re buying a lot of debt,” Sternlicht said.

Barry Sternlicht, the property at 121 Old Mill Road

Barry Sternlicht, former chairman and one of the founders of Starwood Hotels & Resorts Worldwide, has raised the price of his Greenwich home to $5.95 million, from $5.495 million. The 5.8-acre property at 121 Old Mill Road, which went on the market in June 2008 with an asking price of $8.25 million, slid down in market value over the past year and a half, as average Greenwich home prices deflated by 40 percent this year through September, Bloomberg reported. Sternlicht had bought the estate for $2.93 million in 1994. The property includes a tennis court, shuffleboard court, pool and guest house. Sternlicht has expressed optimism about the residential market, stating his belief that the system will rebound. “The U.S. creates one million-something households a year and has for 20 years and will for the next 20 years. And that will create demand,” Sternlicht said. “It is a question of when you’ll make money, not if you’ll make money.”