Billionaire Barry Sternlicht on the ‘category 5 hurricane’ hitting office buildings: Some will become parkland, ‘Maybe fields of grain or something. It’ll be very pretty’

(Credit: Victor J. Blue—Bloomberg/Getty Images)

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.”