Summers is wrong on aggressive lending: Starwood’s Sternlicht

Starwood Capital Group CEO Barry Sternlicht dismissed a comment made by former U.S Treasury Secretary Lawrence Summers urging banks to become more aggressive lenders today, saying the lending environment for commercial real estate is healthy and appropriate.

“I am delighted that banks are not stepping up and doing a lot of construction loans on buildings that do not need to be built,” Sternlicht said, contradicting Summers’ claims yesterday that the country needed to prioritize making capital freely available.

“I am happy with the lending environment,” Sternlicht told Bloomberg News.

Rising yields in commercial real estate will ensure that there are plenty of lenders, Sternlicht said. Indeed, prices for U.S. multifamily, retail, office and industrial buildings have jumped 59 percent since 2009, according to the Moody’s/RCA Commercial Property Index.

Starwood recently led the origination of a $475 million construction loan to allow for a joint venture between the Related Companies and Oxford Properties Group to build the South Tower at Hudson Yards, a financing deal that was notable for its unusual structure, as The Real Deal reported. [Bloomberg News]  — Hiten Samtani