Barry Sternlicht Faces Tough Investor Climate for Hotel Bargains
Photo Credit: Barry Sternlicht's Starwood Capital is already active in the hotel sector via its ownership of SH Hotels & Resorts (pictured: the company's 1 Hotel Brooklyn Bridge). Wikimedia / Opencooper
Skift Take
Investors like Barry Sternlicht tout the hotel industry as an opportunistic place to park capital during the travel recovery. But discounts aren’t coming in as steep as some hoped thanks to Uncle Sam and forgiving lenders.
Starwood Capital’s recently announced $10 billion fund targeting distressed real estate assets faces a hard time finding significant opportunity in the hotel sector.
The Urban Land Institute, one of the real estate industry’s largest think tanks, and PwC released their annual Emerging Trends in Real Estate report this month. The real estate industry views the study — which survey’s roughly 1,200 experts across a variety of sectors and directly interviews more than 900 — as a leading benchmark of how things stand across major commercial real estate sectors, including hotels.
The findings might dampen the mood at investment firms like the Barry Sternlicht-founded Starwood Capital, as they emphasize the major distress and bargain pricing these eager groups anticipated have yet to materialize. Hotel owners have stronger-than-expected leisure travel demand as well as relief measures from central governments to thank for being able to maintain ownership through the worst crisis in industry history.
“Despite an unprecedented level of delinquencies
