YouSaid · the spoken record

Barry Sternlicht

lines on the record: 87
first: 2021-10-04
most recent: 2021-10-04
sittings or episodes: 1
sources: podcast

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“So now we're all paying catch up, which is a little bit what you're seeing, that the rents are going up and catching up for what the period of time we couldn't push rents. And now finally, the government restricted or lifted the no eviction policies, although some of the cities, again in the blue states, are putting them back in, which again, I think is overkill. We have hardship cases for people if they lose their job. But as you know, there's nine and a half million jobs open in the United States. So there's also a situation where people aren't paying rent, collecting excess unemployment, collecting their stimulus checks, and not working because why bother when you can work from home or not work at all and earn more money than you do when you were working. So the government has to figure that out. But in general, apartments are doing well everywhere. And now they're following the housing market, which is if you had told me that housing prices would explode during the pandemic.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“COVID only made it all worse. And so with that as a backdrop, you go to like, where did you invest? Multis were the green asset classes, green light. Multis and industrial. Industrial actually never really burped as people moved to ordering stuff online, logistics, distribution channels, distribution centers, all that stuff was full and got fuller and rents started to really take off. Apartments actually didn't have a great COVID because you weren't allowed to kick people who weren't paying rent out of your buildings and unlike some of the political nonsense around this. Some of these people had jobs. They just found out their neighbor wasn't paying. And so they don't have to pay. We as the nation, I think we talked to 40 reaps when we, and again, we were like the second largest REIT, but we weren't public. We all decided not to raise rents during COVID, even though we could. And even though single family home rental rents were going up 5 to 10%.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“A billboard in San Francisco, like come to us. And literally, how can we help you succeed, which is the antithesis of the environment in New York City. So we don't own anything in San Francisco or New York. We own a couple hotels in New York. We don't own no office, no residential anymore. And we've been active in these markets. We got out years ago, way before COVID.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“We'll start with an overlay because the US is now just like it's politically two countries for investors because the blue states and the red states and maybe you have some purple states like Florida and mostly Texas. But let's call those red states for now. The blue states where populism has gained a footing and there seems to be tremendous pressure on wealth and union strength and crime and a less welcoming business environment. We've tilted for the last seven, eight years. We've tilted the portfolio to investing more in the red states which are actually growing. It shouldn't shock people if they step back and looked at the country that it's the Texas and the Floridas and the Tennessee's that are doing great and people are getting up and moving. They're moving their families and they're going to these states which have a right to work and they have welcoming business and the mayor of Miami put up a”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're coming out of this strange time with COVID. Normally, you look at assets or cyclicality, things get cheap, they look distressed. And I'd love to just. Through a tour of the world, maybe it was just starting in the US.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“So if I thought caprates were compressing, I might think Starwood picked a bad time to sell. Or I'm selling for the wrong reasons, the end of a fun life or something like that. I don't think it's so bad that people think they can't make money if they buy from us. They may have a tenant. We're selling an office building, let's say, because the tenants is expiring in three years, and they just have a different view of the risk than we do. And maybe they know something we don't know. So I don't think it's not been a problem. We sold a zillion dollars worth of stuff.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's the same thing with pe shops selling to one another. It's interesting. We've had running debates about, for example, our multifamily assets. My team's feeling is not to renovate all the units, to let the next guy have the opportunity. And they think it's reflected in the purchase price. Like they'll buy down the cap rate, the yield because they have this upside of renovating the rest of the assets. We kind of prove to them that it works doing 20% of the units and leave 80% of it for them. I can't say I'm on board with that. I would like to do more than we do, but we've had this constant debate and I've won in a couple cases, so we'll see if I'm right as we go to sell these assets because there's also a group of buyers like your home who want everything perfect. They just want to yield and they don't want to spend any money on doing any work. So there's both. So I think the market, and it's true from lying from Blackstone or other firms, again, we can't predict cap rates. I mean, you can. You can have a view, but that's rarely in our investment memos.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“To go through a tour of some of the assets today, particularly post COVID. Before that, I'm really curious about signaling effects. So you've had so much success. And I would suspect that the market thinks when you go to sell something that you think most of the juice is that, how does that play out in terms of transacting on the back end?”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“vehicle to our arsenal, which is this non-traded reit, which is raising a lot of money monthly from retail investors, and that can look for lower-turning real estate with pretty good current yield. So that's less exotic. We sell when we feel we've gotten most of the juice out of it, but we were dead wrong about some of the departments we sold early on because we picked the weaker ones, sold them to pay down capital. And of course, cap rates dropped, yields dropped 200 basis points or multiples increased probably 10 times. So at the time, COVID hadn't happened and it wasn't that obvious.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“fourteen times or eighteen times or you sell at eight times because the world has changed and their prospects and growth prospects have changed. So with investing in real estate, we don't model caprior compression, but rates have stayed low for so long and there's been so much quantitative easing around the world. There's so much weight of money in the world. It's so staggering that it's looking for safe yield and real estate's a proxy for that. I pay attention to what we own and what's doing well and what's not doing well. That influences additional acquisitions. You have some overlying themes and of course you look for busted things, things that have the wrong capital stack. We're agnostic. We don't care where we invest. We just approved a deal in Paris this morning and then we're bidding on an apartment portfolio in Florida and they're going into different vehicles but they're similar things and then looking at it take private of a public hotel company. We got a lot of variety of things. And we also have added a”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pro forma. You're buying a company, it makes a billion dollars, and you think you can grow it to $2 billion in five years. You probably bought it at 12 times and you're selling it at 12, 13 times. Where you get lucky or hurt in all these leveraged places, you sell it.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or red, because I'd leave dark red for retail, which imploded. And because of that, like everything else, I learned early on that the flow of capital can overwhelm fundamentals. So because those other asset classes, which traditionally would probably be taking 60, 70% of all the money set aside for real estate, were shut apartments and industrial would zoom and the pressure would knock yields down. And that's exactly what happened. So it happened a lot faster than I thought. And then the most recent thing is rents have taken off. They're double digit rent increases in apartments following like the single family home rental business, which is another business we started and took public and then merged twice. We're in again but privately, not publicly. My job is to find spot trends and invest behind them and think about what the opportunities are. It's hard. You're doing a P deal. You're doing a private equity deal and you're buying a company. You probably don't have the multiple compression on your.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Everything has its times like wine. Well, our funds have 10-year lives, so we have to be cognizant of that. We have two one-year extensions if we want it, things that we think have a lot of upside we'll probably keep, things that we've gotten most of the upside because we finished a renovation, leased the building we might sell. Generically today, just being relevant today and stay away from history. I mean, today you have one market on fire, one in its associated markets, which is the residential markets, multifamily rentals. I think we have 110,000 apartments something like that. They're one of the largest owners in the country, of which 40,000, I think, are affordable housing. So that's a business that has no technological risk, really. Nobody can sleep in their computer. It's one part of real estate that isn't going to be affected by most anything. So we made that call a couple years ago as COVID spread that it would put office into, at best, a yellow category. Hotels were dark red.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Obligations not to buy an externally advised REIT and they got them waived. So it basically happened was a lot of the shareholders of Starbuck Hotels decided to, which had done magnificently over the 10-year, 10-year I was CEO and was the best for forming large cap hotel company in the world. They just basically said they backed me again. The market misread that and decided that there was this huge opening. We could have even raised more money, but the banks didn't want us to sweep every dollar. So they then following us were Apollo's one and Blackstone did one and colonied one and Aries did one. So those actually got harder and harder and harder to do. So the market ended launching more mortgage retreats. But again, Wall Street can't get enough of a good thing, as you've seen in Spackland. So they kept coming with more and more mortgage reads until the market said enough. That company is now the number one performing mortgage rate in the nation. I think my numbers might be slightly old, but it's returned 13.4%.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Change its name to iStar Financial to avoid confusion with Star Ward Hotels and Starward Capital, the private company. So iStar's still around. We spun out the current CEO who left Jay Sugarman. He's now the CEO. He's been there forever. And then actually I redid that in 2009 when there was no debt available. I went back to Wall Street and said, we want to be a lender. We want to raise a blind pool to lend. And I got turned down by every bank except for Deutsche Bank. And they said they'd sticker the deals. So we agreed to go out with $500 million on the cover and try to raise a lending vehicle. It was the second largest IPO of 2009, which is obviously the year after the financial crisis. And it was only passed by Hyatt's IPO in December of that year. And instead of raising $500 million, we raised $900 million. So it was the largest blind pool at the time ever raised on the New York Stock Exchange. And many of our shareholders had chartered”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our job is to allocate capital to the best returns for the least risk. I do that across all the asset classes in real estate. I always say bet the jockey, not the horse, right? It's like our job is to jump from asset class to asset class, from apartments, hotels to land, single family homes, student housing, ski resort, mammoth mountain, we own golf courses, anything we can call real estate. We throw in. We even bought airports because we wanted the hangars at the airports. So we look for the best returns and then you add the fact that we can do it all over the world. We've been all over the world, whether it's Thailand or Japan or Europe. We said the wine drinking countries, but also the Nordics now and Oslo and Copenhagen and Sweden. So we've invested pretty much all over the world. And we also, at times, we've gotten out of the equity and just on debt. And so in the old days, we'd done a mezzanine fund that we took public. That created a company called Starward Financial, which”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Started campaigning with all the senators from all New England to say you should let everyone pair. This is not a tax dodge, which they claimed it was. And as we were making significant progress, they introduced the IRS restructuring bill, and they removed our rider and threw it into that bill. And it passed, I think, 102 to zero, whatever the number of centers. And I just got schooled. I got taught a lesson because Bill Marriott's Son or daughter is married to Orange Hatch's son or daughter. So I was dead on arrival. I never got to testify in front of Congress and tell them the committee and tell them that the world should all be paired.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“supporter of the Republican Party, which Bill Marriott was, I went, go down to Washington, I'll wear sandwich boards, I'll tell everyone everyone should pair. This will get rid of all the conflicts and all the misalignment of interests because management companies which only own management contracts want you to build. So if you don't build, they don't get revenue and they don't really care how the asset fares, right? So you would have wild increases in supply, cash flows that crash. This way, when you glue the management company and the asset together, you'd all be in the same bed. You would not have the overbuilding that you had historically. So I went to Washington. I met with Clinton's budget director. And he said, you can kill this on the hill. And I'm like, so I go to the hill. I meet with Treasury Secretary. And I say, how'd you even score this? And I said, your numbers are all wrong. I think they said they came up and said it would be 10 million dollars to the good. The assumptions were so ridiculous. I said, this ridiculous.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm like, oh my God, what happens if they don't pay debt service? Like, what happens if we don't have the cash? I kind of tripped into this big company. We had 120,000 employees in 80 countries. I went from a domestic collection of pretty crappy assets to better assets. And then fantastic assets. And the idea for me, I own the best Western El Paso and the old embassy suites in Tempe, Arizona. And I was trading them for the St. Regis and the Danielli and the Gritty Palace. And like, oh, I'll put a floor under the stock. This will never go down. And then, of course, Marriott, which is now seen as past them. And obviously Bill Mary had been at this for 40 years and I've been at it for three. He decided that this enough is enough and they're going to get rid of our parish share structure. So he went to Washington and in the budget reconciliation bill of that year, they threw in a little provider to get rid of the paired shares, like to obliterate their structure. And I'm being naive in everything and not a lifelong.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“A $14 billion company. And the stock, the shareholders were so loyal to us, and our numbers have been great. The stock went up 75% a year, three years in a row, that the stock rose from 53 when we announced the ITT deal to 60. So the value of the deal went up and Bullenbeck couldn't compete with that. So I went to the St. Regis, pretty famous. And we pled our cases to the shareholders. And I was expecting them to top our bid right to the last moment, but apparently their board stopped them. And they had a low multiple stock, and I had a very high multiple stock. Our stock was at 17 times, and theirs was like 10. So as long as I use the stock, I couldn't lose. Some of our shareholders were kind enough to say that our stock was worth more than money. So I was like, good. So our stock stayed in the 60s and the deal closed. And then all of a sudden I had a $20 billion company on my hands with, I think $12 billion of debt on assets in like Egypt and like I need some Baba.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“The company and we went up against Hilton and they were offering at the end I think they offered $80 in cash. We offered like $83 in stock in cash. I think 84 54 in stock and 30 in cash. I couldn't do an all-cash deal. I didn't have the balance sheet for it. But a $7 billion company, which was Starwood, which had risen to be $5 billion, plus Weston, which was $2 billion.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Recently passed away and said, I'll be your white knight. You can put IT Sheridan into the paired chair and it's all over. You'll create all this incredible value. The bank, I think, was Goldman. They were advising them. And we were option number two or three. They didn't think I was serious. And Hilton didn't go away. And I was actually playing golf with the late Jimmy Lee up at Wingfoot, playing one of the better rounds of my then life. And I got a call in the 11th hole that Rand Arisk wants to see you. So I drove to New York, didn't finish my golf game. And I walk in his office and I'm 35, 36, and ran as a patrician 60-something. And he has like seven secretaries. And there's only two people on this floor of the building. And there's beautiful art. And he says, the company's yours. And I'm like, excuse me, if you can hit this price, you can be our white knight. And so.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“On acquisition spree. We started using the aggressively using stored capitalist people to buy assets and we started buying individual hotels and then we started buying the same time I bought Weston hotels privately because it was too leveraged for the public market. We was a $600 odd million dollar deal, which we split with Goldman Sachs, but it was our deal. We just didn't have the money. We put up $100 million. They put up $100 million. It must have been like $800 million. And we borrowed like $600 million. In 1998, it was time to buy Weston and Goldman represented. We wanted to buy at Star War lodging. And Goldman was representing because I couldn't be on both sides of the trade. And we struck a deal at $38 a share. And the stock then rose to $54. And then I happened to see that Steve Bohlenbach and Hilton made a hostile bid for ITT Sheridan. And at first, I was like, I called Rand Arisk, who just”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we were able to buy the debt. And then I decided to take a whole bunch of the real estate hotel assets that we bought and go public with them. So I contributed some hotels in Dallas, some notes on other stuff, and the debt we bought. And we basically took over that entity. We own 70 something percent of it. And I took over Star Wars what became, it was Hotel Investors Trust, where we're going to call it Starwood Hotels Investors Trust, but you can do the acronym in your mind. And we decided not to do it. So he changed the star lodging and kept the stock symbol hot. And we were 8 million equity. And in three years, we were $20 million.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we had been buying hotels and a couple of things happened. There was a company bought Davidson was managing a bunch of their assets. That was a public company called Hotel Investors Trust. And the symbol was hot, H-O-T. And it was basically a bankrupt reit. It had about 20 hotels. It had about $200 million of debt. I think it had an $8 million market cap. But it also had this thing called a paired share structure where the management company was allowed to manage the assets of the REIT, which technically in all other hotel REITs, because REITs can only own passive income streams, is outside of the entity. This was in the entity, so the shareholders would own both the management company and the asset, and there'd be no conflict of interest between the two, because you own both of them. So we thought this was cool. So we bought the debt of that company. With 200 million, we started buying. It was held by four different entities. We started buying it. We approached them and said, your debt isn't worth par. One by one, they all agreed.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Were like go fish. We went to see Westinghouse. That was happening and going out of business sale. Westinghouse Electric. And I said, do you have any apartments? They said, no. Do you have any land? They said, no. So what do you have? They said, we have these hotels. I said, interesting, nobody wants to buy hotels. It was under contract to a different, it was a group called Davidson Hotels down to Memphis, Tennessee. I went to see the CEO and I said, you just have more fun with us than you would with that other buyer. And he actually agreed. And we wound up doing that deal with the early predecessors of Blackstone's real estate group. We split it because it was more bigger than we were. And we made a lot of money. We did really well. But institutions were, it was an institutional asset class. And you can buy them really well. We called the business cycle right. And they were pretty good assets.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“He needed girth. He needed a bigger company. He needed more units. We were actually owned more of the company than Sam did with our units because he was more leveraged than we were. We made our five-year plan in 18 months. So when I started my business, I said, okay, if I make $5 million over five years, I'd be delighted. And we made more than twice that in 18 months.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then all of a sudden it became the exit strategy for every real estate guy on earth because, again, the dividends were lower than the cost of debt.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the rules of real estate is when prices get to replacement cost, you should sell because when the prices get that high, new construction begins. And so they were in that case, we thought these assets, which were old, had risen so much in value. So what happened was the reed industry was born back then. And the reed industry was born not because people wanted to the good graces of these very rich real estate guys, it's because they were all on recourse debt. And interest rates plummeted. And all of a sudden the dividend yields of an unleveraged real estate portfolio was higher than interest rates. So Sam Zell took public his apartments and got off mountains and mountains of recourse debt. And so those Simons took Went Public with their holdings and everybody used the public markets to deleverage and get off those recourse guarantees they had. And so the reed industry was born and then it sort of took off from there. It had been around, but it had never been legitimate and never been large enough to matter.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“513 apartments for $3 million. It was a $15,000 apartment. This was from the government. The government formed this Resolution Trust Corporation, which had all the assets of the savings and loans that had gone under to sell. So we would go to auctions in fields with pickup trucks and there'd be music playing between portfolios of assets they were selling that went to these auctions. And there was a multifamily in Ocala and it came with a llama farm and a whole bunch of other stuff. So we buy buckets of stuff they were selling and we would show up with our $21 million. I went back to the families and said, we've already spent your $21. We need some more money. So they said, how much you need is at least 50. So they topped us off to $50 million. And then we were able to get a credit facility from Cargo. And we went on a buying binge. We bought 8,000 apartments in 18 months. And I sold them all to Sam Zell and we tripled their money in 18 months.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I met a fellow who I cheered a beach house with in West Hampton, and he said he'd back me when he found out I was thirty one, thirty actually at the time. And then my old boss who felt bad about firing me, gave me $2 million. And then the Ziff brothers and also the Burden family, which are the Vanderbilts, they put up 10 million each. That was our fun $21 million. The thing is you can't buy a lot for $21 million in real estate. But assets were so cheap. We bought our first deal was the Windmill Springs Apartments in Colorado Springs.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“I ask those questions of my then boss and he said, you just don't understand real estate just doesn't work like that. It acts differently. And I'll never forget when the world did fall apart and the stock market for real estate crashed. I saw one of the dads of David Simon was in our offices crying because malls, everyone was recourse back then. And malls, which the institutions were buying at six yields, were financed with 9% debt. So without the capital markets open and people saying you can't pay your debt service, they became insolvent overnight. And there was a lot of grief. So that was when the company had to cut back, they let me go. And I was one of the top 10 partners and I was an acquisition guy. So I was kind of incredulous, but I was expensive. The firm was going through a serious crisis. Even our firm had done recourse debt on some deals and they had to scramble to figure out.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“God, it was a terrible time to get started in real estate. Let's say, graduate in 86. And by 1991, we had the failed SNL crisis and real estate took us a lacking. And I kind of saw the handwriting on the wall. I could see what was going to happen. In those days, you had what we call inverted yields. The cost of the property was, so you'd buy assets, let's say, at a 5% yield and finance at seven and eight. And that seemed to make no sense to me. Like, why were we buying things at fives when you could buy corporate bonds at nine?”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“I got this offer from a group in Chicago, and I decided to venture to Chicago, or I'd have more freedom. They also had a lake. I grew up on water and they had that lake. So it looked like I was neuronocean, so I felt okay about it. And everyone from Chicago seemed to like Chicago, so I enjoyed my time there.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“But I got online to buy my first lotto ticket, and I think it's the only latto ticket I ever bought, and I said, what would I do if I won lottery? And I said, I go finish my education. So I only applied to two schools, Harvard and Stanford. I got into Harvard and got waitlisted at Stanford and I decided to go. And then when I got out, I tried to get a job with Wall Street again. And I got offered a job in Goldman Sachs, this real estate group. I'm kind of a frustrated artist. I took art classes in high school. I went to Silvermine Guild for artists. I painted. Real estate seemed like, okay, it was also the last great imperfect market. Things happen in the real estate market that don't happen in the securities market. People do deals because they had tax situation or they don't want people to see what they screwed up. So they call you. And stuff happens even today that's almost inexplicable. People selling things perhaps off market because they don't want people to know about the trade. So I got an offer to go work at Goldman Sachs in the real estate group or.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“Went to Brown University Coming out of Brown, I wanted to get a job in Wall Street, but I had no background in Wall Street. And so I became an arbitrage trader. First, I got a job at Boozell, and then I left that and became an arbitrage trader. And then I worked for Credit Suisse. And I kind of liked the markets. I got into business school and I wasn't sure I was going to go because it's making decent money and I was broke.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Barry Sternlic, the chairman, CEO, and founder of Starwood Capital Group, a ninety five billion dollar real estate investment firm with four thousand employees and sixteen offices worldwide. Barry has invested nearly $200 billion across every major real estate asset class around the world. The list of related real estate companies he's created, results, and associated accolades are extensive and truly impressive. Our conversation covers Barry's beginnings as an entrepreneur and real estate investor with some great stories along the way. We then turn to the current opportunity set across real estate asset classes and geographies and close with his approach to managing his own capital through his family office, SPACs, and experience during the pandemic. Please enjoy my conversation. With Barry Sternlic.”
2021-10-04 · Capital Allocators · Barry Sternlicht – Masterclass in Real Estate in a Post-COVID World (Capital Allocators, EP.216) · IDENTIFIED FROM THE TRANSCRIPT · source