Starwood Capital is raising money for a new investment fund, CEO Barry Sternlicht said yesterday at NYU Schack’s capital markets conference at the Waldorf Astoria Hotel, and may also choose to sell a key portfolio as the government discourages the fund from leveraging its assets (see photos from the day-long event above).

“We want to leverage the portfolio and the government doesn’t want us to,” he said. “We’re going to have to sell it because it’s stupid to own it unleveraged. Our leverage levels are less than 30 percent. It’s crazy.”

Starwood previously raised $2.8 billion through two funds in 2010 — the Starwood Global Opportunity Fund VIII, which raised more than $1.8 billion, and the Starwood Capital Global Hospitality Fund II, which raised $965 million, The Real Deal previously reported. [more]

From the November issue: Three autumns ago, the collapse of Lehman Brothers knocked the wind out of New York’s real estate industry. Home sales flattened. Prices plunged. And, as layoffs mounted, office buildings emptied out. While there have been some spurts of activity, the industry has not gotten back to the highs of the boom. In fact, as the unemployment rate still hovers at an uncomfortably high level, and Wall Street (a once-reliable real estate engine) reports losses, it seems that a complete recovery might be years away.

All the same, there are signs of comebacks — whether they are from developers who once defaulted on mega-loans and seemed like pariahs, or stock prices that have bounced back from the doldrums at some public real estate companies. There are also geographic stretches of the city that had been pocked with empty retail spaces and empty condo buildings, but are now filling up with stores and residents. There are even some bankers who had been caught up in the subprime mess who are now back on the lending scene in a big way. [more]

From left: Bradley Mendelson, executive vice president of Cushman & Wakefield; Jeff Blau, president of Related Companies; Amira Yunis, executive vice president of Newmark and Jason Pruger, Executive Managing Director at Newmark

New York retail brokers and principals are making late appointments and boarding flights over the next few days in preparation to attend the world’s largest retail real estate show in Las Vegas.

Most of the city’s real estate professionals who focus on leasing and sales of store spaces will be at the International Council of Shopping Centers global convention known as RECon, from Sunday to next Wednesday, at the Las Vegas Convention Center.

The attendee list is a Who’s Who of New York City retail, from landlords like Vornado Realty Trust, Crown Retail Services and Forest City Enterprises to brokerages like Cushman & Wakefield, CB Richard Ellis and Northwest Atlantic. [more]

The rebound in U.S. commercial property prices is outpacing that of commercial rents, painting an unrealistically optimistic picture of the market, Michael Fascitelli, CEO of Vornado Realty Trust, told a crowd at Manhattan’s De La Salle Academy yesterday. “I think we’ve bottomed, and we’re going in an upward trend,” Fascitelli said, but added that “the pricing is indicating a much more robust recovery in three to five years than I think we might have.” According to Reuters, Fascitelli cautioned that an inevitable rise in interest rates might soon stall that upward pricing trend, leaving landlords dependent on still-sagging rental income to maintain their property values. [more]

From left: James Stuckey, dean of the NYU Schack Institute of Real Estate and Michael Fascitelli, CEO of Vornado Realty Trust; Panelists from left: Larry Silverstein, Michael Fascitelli, Willliam Mack, Marc Holliday and Bill Rudin

“Sometimes being a REIT felt like being between a dog and a fire hydrant,” Vornado Realty Trust CEO Michael Fascitelli said this afternoon, reflecting on the past couple of years in the industry before a packed ballroom at the Waldorf-Astoria hotel, and pausing for effect.

But no longer.

While public real estate investment trusts suffered significant losses in the immediate aftermath of the real estate crash, they’ve bounced back with impressive vigor, Fascitelli said. Plus, he offered as proof, there were very few bankruptcies.

Speaking on a panel at NYU Schack Institute of Real Estate’s annual conference on capital markets, Fascitelli was joined by Marc Holliday, who said that life is pretty good over at SL Green right now, too. [more]

Some of the top 100, from left: Stephen Ross, Marc Holliday, Andrew Mathias, Mort Zuckerman, Dolly Lenz

The New York Observer has released its list of the 100 most powerful people in New York City real estate, with Stephen Ross, chairman of Related Companies, ousting last year’s number one ranked player, President Barack Obama from the top spot. The list is populated with many long-time real estate bigwigs. SL Green honchos Marc Holliday and Andrew Mathias jointly took the second place title, up from last year’s showing at number seven, while Boston Properties CEO Mort Zuckerman stayed in the third place position. [more]

The city should help modernize its corporate offices by giving developers incentives to replace Park Avenue’s aging towers, Steven Roth, chairman of Vornado Realty Trust, said in his annual letter to investors, which was released yesterday in a regulatory filing. “To keep regenerating New York, why not upzone Park Avenue as an economic incentive to tear down old buildings and replace them with new-builds which may be, say, half again the size,” he said, noting that this strategy has already worked in London. In the letter, Roth, who stepped down as Vornado CEO last year as Michael Fascitelli took the helm, was otherwise optimistic about the direction the market is headed. He said Vornado is keeping many of its vacant New York office spaces off the market in anticipation of rising rents. But while that’s good news in many ways, it also means the best deals in real estate may already be behind us, Roth said. “All the money was made buying securities in the panic,” he wrote, describing the ongoing bidding war over bankrupt General Growth Properties. “Whoever the final acquirer turns out to be, they will be paying a fair, not distressed price.” [WSJ] and [NYO]

From the March issue: Like flavors of ice cream, every year real estate investors choose a preferred asset class, from multifamily residential to office buildings, anchor retail to hotels. The flavor for 2010 is obviously the distressed debt or note. Investors are coming from divergent backgrounds. But we all know that the cast of characters seeking distressed debt (or a mortgage that is more than 90 days past due) have one thing in common: They all want it at a bargain-basement price. A number of banks are now selling this distressed debt — just not at those deeply discounted prices. [more]

While several of the city’s top brokers said the leasing market is approaching a floor for the current down cycle, potential office building buyers are preparing for years of further rent declines, real estate experts said at a forum this morning. “This is a unique city. It is at the bottom or close to [it],” Bruce Mosler, president and CEO of Cushman & Wakefield, said of office leasing in Manhattan. He was on a panel organized by business publisher Bisnow at Cooper Union. But just half an hour earlier at the same event, Michael Fascitelli, president and CEO of landlord Vornado Realty Trust, said potential buyers of office buildings were not predicting rents to increase for several years. He said that expected annual rent increases during the boom years, which were as high as 15 percent, are now at zero. And they could remain at zero for years. He added that to buy a building, a purchaser has to forecast a rent increase at some future time. [more]

From the October issue: Stupid, stupid, stupid cheap.” That’s how low prices have to fall before the commercial real estate market hits bottom, Steven Roth, the chairman of Vornado Realty Trust, predicted earlier this year. In a letter to shareholders in April, the square-jawed mogul confided, “I think we are now at the third and last stupid. Not that he’s buying yet. But in recent months, the 67-year-old real estate titan, along with CEO Michael Fascitelli, the other half of the so-called “Vornado Tornado,” has been building a war chest to go shopping. And when Vornado gets ready to shop, there’s good reason to pay attention. [more]