Starwood eyes $11B raise for real estate, distressed bets

Barry Sternlicht’s company is also selling a $2B infrastructure loan portfolio

TRD New York /
Jul.July 31, 2020 03:00 PM
Starwood Capital Group CEO Barry Sternlicht (Getty)
Starwood Capital Group CEO Barry Sternlicht (Getty)

Barry Sternlicht is putting his money where his mouth is.

The Starwood Capital Group CEO last month quipped, “when it’s really ugly, it’s a good time to invest.” Now, the company is looking to raise $11 billion for real estate and distressed bets.

The firm’s Starwood Global Opportunity Fund XII is looking to raise $8 billion for real estate acquisitions, and a sidecar fund will raise $3 billion for distressed opportunities, Bloomberg reported.

Starwood, partly owned by Dyal Capital Partners, raised $7.55 billion in 2018 for its 11th flagship fund, its biggest ever. That vehicle’s investors include some of the largest public pension funds in the country, such as the Teachers’ Retirement System of the State of Illinois, Teacher Retirement System of Texas and New York State Teachers Retirement System.

The fundraising comes as global markets are in chaos — the U.S. Gross Domestic Product fell 9.5 percent in the second quarter, the largest percent decrease on record.

And Sternlicht predicted things may get worse, particularly for New York City if the government decides to raise taxes on the wealthy. That would cause a “negative cycle” of deteriorating services, less policing and a dirtier city — all things which could erode commercial real estate values.

Sternlicht’s worst nightmare — raising taxes on the wealthy — nevertheless gained some steam this week, after both the leaders of the state legislature broke with Gov. Andrew Cuomo and issued statements in support of taxing billionaires.

Things haven’t been pretty for Starwood, either. Its stock prices took a tumble, down 40 percent from last year, and its retail portfolio has been hit hard by the coronavirus crisis.

Starwood is also shopping around a $2 billion energy infrastructure loan portfolio it purchased in 2018. [Bloomberg] — Georgia Kromrei


Related Articles

arrow_forward_ios
Interest rate drops spur loan requests from multifamily borrowers (Credit: iStock)

Multifamily owners rush to refinance their mortgages

Multifamily owners rush to refinance their mortgages
1960 Grand

Starwood, Artisan pay $127M for El Segundo building

Starwood, Artisan pay $127M for El Segundo building
Best of TRD 2019 promo

Coming soon: The Real Deal’s Best of 2019

Coming soon: The Real Deal’s Best of 2019
2201 Rosecrans Ave in El Segundo

Continental snags $55M refi on El Segundo office portfolio

Continental snags $55M refi on El Segundo office portfolio
From left: Gavin Newsom and David Chiu (Credit: Getty Images and iStock)

Will rent control dent the multifamily market? Lenders, investors weigh in

Will rent control dent the multifamily market? Lenders, investors weigh in
Starwood Capital Group CEO Barry Sternlicht and Lantana campus (Credit: Getty Images and Ehrlich Yanai Rhee Chaney Architects)

Starwood Capital set to buy part of Lantana office campus for $220M: sources

Starwood Capital set to buy part of Lantana office campus for $220M: sources
East LA Community Corporation President Isela Gracian, CIT Bank President Robert Rubino and the two projects

East LA Community Corp. lands $55M in loans for affordable housing projects

East LA Community Corp. lands $55M in loans for affordable housing projects
Acres Capital CEO Mark Fogel with a rendering of project

Chateau Group scores $44M bridge loan to build Marriott-branded hotel in Arcadia

Chateau Group scores $44M bridge loan to build Marriott-branded hotel in Arcadia
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...