Former hotelier plans to restyle Miami condos by foreclosing on errant borrowers

Barry Sternlicht and Paramount Bay condominiums

Barry Sternlicht, one of the busiest buyers during the economic downturn, plans to transform the 47-story Paramount Bay condominium in Miami into a haven for wealthy buyers, the New York Times reported. Though the condo is in need of serious repairs, Sternlicht — best known for creating Starwood Hotels & Resorts, which he built into a public company with $6 billion in annual revenue — is not deterred. In the last year and a half, his private equity firm, Starwood Capital, has raised more than $3 billion. He recently acquired the $4.5 billion real estate loan portfolio of Corus Bankshares, the nation’s largest condominium construction lender until it failed last September because it had financed too many projects like Paramount Bay. The following month, Sternlicht and a group of investors won the loans in an auction run by the Federal Deposit Insurance Corporation, paying $554 million for 40 percent of the package. The FDIC holds the remaining 60 percent. Sternlicht now hopes to foreclose on many of Corus’ errant borrowers, restyle their buildings and sell units for a significant profit once the real estate market recovers. Though some are skeptical about his prospects, others believe Sternlicht will succeed, though it may take several months to see the results. [NYT]

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