Sternlicht: Worries Aside, CRE is Investors’ ‘Sweet Spot’

NEW YORK CITY-“There’s a lot to worry about,” Barry Sternlicht said Friday morning in the course of a Q&A with Bloomberg TV’s Carol Massar. The chairman and CEO of Starwood Capital Group peppered the discussion with examples of what has him feeling uneasy, ranging from the euro zone crisis to the potential for a near-term oversupply in the Manhattan hotel market to the long-term and long-deferred consequences of Uncle Sam putting everything on the credit card. Yet with it all, Sternlicht said commercial real estate, at least the domestic variety, is “a sweet spot” as far as investors are concerned.

That’s especially true for overseas investors, he pointed out, and particularly when they consider the alternatives for parking their money. “A 4% yield looks funny to us historically,” Sternlicht told the audience at the second annual Global Real Estate Markets Conference, held at the New York Stock Exchange and sponsored by the James A. Graaskamp Center for Real Estate at the Wisconsin School of Business. “But when they look at treasuries with a 1.7% yield, it’s not bad.”