Billionaire Starwood CEO Warns of $1 Trillion Losses in Ailing Office Market

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The ailing office market is headed for $1 trillion of losses, billionaire and Starwood Capital CEO Barry Sternlicht said.

Per Bloomberg, Sternlicht said at the Global Alts conference in Miami Beach that US office properties, once a $3 trillion market, are worth about $1.8 trillion now. The cratering values have been the result of remote work being solidified as a lasting legacy of the COVID-19 era.

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The billionaire characterized the dilemma facing the office segment of the commercial property market as an “existential crisis” and slammed the Federal Reserve for leaving a “serious mess” in capital markets and the real estate market.

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The fourth quarter of last year saw the US office market mark its fifth straight quarter of negative net absorption of office space. With 5 million square feet of new supply, the overall office vacancy rate rose to a 30-year high of 18.6%, according to CBRE.

https://www.businessinsider.com/office-crash-property-values-commercial-real-estate-barry-sternlicht-economy-2024-1


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