Commercial Real Estate Finance

Posts Tagged ‘Starwood Capital Group’

Mensch:

Noun, informal. A decent, upright, mature and responsible person.

Schlemiel:

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser.

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Mensch of the Week:

Barry Sternlicht, Starwood Capital Group

I guess there are plenty of reasons to name Barry Sternlicht, Chairman and CEO of Starwood Capital Group, our Mensch of the Week. Or Month. Or Year.

The private equity group he founded in 1991 has grown into a juggernaut of the investment world, holding billions of dollars in assets including hospitality and residential real estate, hotel operations, and a massive mortgage REIT, not to mention a sizable presence in the energy sector.

Moreover, Mr. Sternlicht has established a brand consistently associated with luxury. Case in point: he is behind Starwood Hotels & Resorts, which owns and operates such brands as St. Regis, W Hotels, and Westin (though Mr. Sternlicht left this operation to focus on Starwood Capital). Mr. Sternlicht’s firm also owns (not even kidding here) Baccarat Crystal. Lotsa fanciness.

But Mr. Sternlicht is our Mensch of the Week because of his company’s recent sale of four luxury hotels in France: Concorde Lafayette in Paris, Hôtel du Louvre in Paris, Martinez in Cannes and Palais de la Méditerranée in Nice. The portfolio was acquired by a Qatar-based sovereign wealth fund for (according to one estimate) as much as 800 million euros. 

Oh boy! This means I get to use my fancy currency converter (Google) to see what that would amount to in US dollars!

In U.S. dollars, that would be roughly $1.07 billion for the four properties, an example of which is the Palais de la Méditerranée pictured to the right.

What a dump.

European real estate, particularly trophy properties in key markets like Paris (and to a greater extent, London) is often extremely desirable to investors outside the Continent. Particularly, it seems, among investors in the Middle East, where private and state funds have been investing aggressively in preparation for a potential downturn affecting their primary source of wealth–oil.

Like fellow private equity giant Blackstone (NYSE: BX), Starwood has emerged as a bit of a trendsetter, the type of company that increases the value of an asset as soon as it buys it. To be sure, a luxury hotel in any of these French destinations is going to be valuable no matter who owns it, but I can’t help but think  Starwood might have held a bit more negotiating strength than another seller would have.

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Do you ever get in one of those moods where you really want to eat something in particular? You feel like you need to eat something specific and nothing else will satisfy your craving. Like, right now, I am craving a chocolate milkshake from the little ice cream shop near my home. Nothing else will be good enough, and if I try to substitute anything for that chocolate milkshake, I will surely be disappointed.

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Commercial Real Estate Week in Review for the week of April 23rd to April 29th

- London & Stamford REIT Buy Two Office Complexes in London’s Main Financial District.

- Grubb & Ellis Healthcare REIT Buys All 7 of the Milestone MOB Properties.

- Malls Look to Phone Apps to Help Shoppers.

- Barclay Capital Attempts to Sell Forclosed CRE Loans and Properties.

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Commercial Real Estate Week in review for the week of January 1 to January 7.

-Nontraded REIT transparency is improving as more companies report share value of common stock.

-Neuberger Berman Real Estate Fund is  looking for REITs to beat the market.

-Pebblebrook Hotel Trust is looking toward acquisition possibilities.

-Healthcare Trust of America finalized the acquisition of  medical office buildings.

-Brett White, says commercial real estate is in the early days of a recovery.
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For the Week of February 20-26

- Should Fannie and Freddie be converted to non-profit, US-owned entities?

- Simon Property Group and General Growth Properties (two of yesterday’s post’s top earners) head to bankruptcy court in the $10 bil buyout deal.

- Can real estate investors bank on Hollywood‘s staying power?

- John Klopp of Morgan Stanley sees debt investing as a significant opportunity going forward for investment banks.

- Does a 75% increase in sales volume in December over the prior month signal a true bottom in the market? Read the rest of this entry »

Ever wonder how people become successful?  How people go from nothing to the top of the world?  Or does unabashed success seem like an unattainable pipe dream that happens to “other” people, much like winning the lottery? In this video courtesy of the Wall Street Journal, Barry Sternlicht essentially gives the humble and abbreviated version of how he went from an unemployed 31 year old with a baby on the way, to the CEO of the biggest hotel company in the world just seven short years later. Color us at Llenrock impressed. Read the rest of this entry »

Barry Sternlicht, former CEO of Starwood Hotels and Resorts & Founder of Starwood Capital Group, has been making some “interesting” business decisions lately. Just four years after Starwood’s acquisition of Paris’ acclaimed Hotel de Crillon, as well as the French crystal company Baccarat, Starwood has put the Hotel de Crillon back on the market. (If you’ve got the $420 million they’re asking, then it’s all yours!) Upon purchasing these two high-class assets, Sternlicht had a vision to create three new hotel brands: Baccarat Hotels and Resorts (five-stars), “1” Hotels & Residences (“green” luxury), and Crillon (six-stars). All three were to be held by the Starwood Capital Group Global. (Just in case you’re not familiar with Starwood Capital Group, they are a real estate private equity firm that Sternlicht started after leaving Starwood Hotels and Resorts. The two companies are completely unrelated.) Today, there are only a couple of Baccarat Hotels in existence and construction is underway on the “1” Hotels. The Crillon hotel chain, which was the most anticipated of the three, will clearly never come into fruition. Why is Sternlicht selling his baby you ask? I couldn’t tell you…but what I can tell you is this:

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