Posted on 07/21/2023 12:48:13 PM PDT by CFW
Surging interest rates and the rise of remote work have combined to create a nightmare scenario for commercial real estate investors. Just ask Barry Sternlicht, co-founder, chairman, and CEO of Starwood Capital Group, a real estate investment firm with $115 billion in assets under management.
“There’s a hurricane over real estate right now,” the billionaire investor told David Rubenstein, co-founder of the private equity firm The Carlyle Group, in an interview for Bloomberg Wealth taped June 28. “We’re in a category 5 hurricane, and it’s sort of a black cloud hovering over the entire industry until we get some relief or some understanding of what the Fed is going to do over the long term.”
Sternlicht, known for criticizing the Federal Reserve’s aggressive interest rate hikes over the past year, said he believes his industry is a victim of central banks’ efforts to tame inflation. He had some thoughts about how much damage the hurricane could do, and it’s not clear if he was joking.
(Excerpt) Read more at finance.yahoo.com ...
House homeless there.
That's why one can expect them to bailed out by the feds on our dime, just like Silicon Valley Bank's (SVB) larger depositors were bailed out.
Sternlicht? I bet he was teased as a yute.
The question is how will Barry Sternlicht and his ilk get the taxpayers to bailout his investment mistakes. Perhaps Sternlicht has Janet Yellen and Gary Gensler on his speed dial.
That’s what I am, 566 miles from the office.
Wasn’t Risk Management the problem in previous crashes?
They’ll be like the megastructures in Dredd.
Just crack, murder, and whores.
I suspect we will see .gov programs to save office buildings and real estate soon.
Why? Tax revenue. The government HAS to save them, or die.
Things are going to get interesting kids.
Yes, failing at risk management is risky.
Correct.
The implications make 2008 look mild.
And, once you go remote, you are competing with everyone in the world for the same job. I think Croatia and India can do things cheaper than New York.
The decline is baked into the bread already. What is an open question is if we will get a government ending collapse at the local, state, federal, or international level. The various governments can see this, and are not just going to let San Francisco or New York decline while Idaho and Ohio stumble on.
How did those lockdowns work out?
And if you can live anywhere and telecommute, why live in places where the cost of living is high?
Maybe start a derivative department…Risk Management of Risk Management.
Risk Management (dx/dt)
Cue up movie Margin Call.
Well said, sir.
That’s crazy. It’s on my screen right now on pause…
You got it, you got it!
He was so brilliant in that movie.
Once there were parking lots
Now it’s a peaceful oasis
You’ve got it, you’ve got it
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