Barry Sternlicht, the CEO of Starwood Capital Group, recently defended the decision to gate withdrawals from the Starwood Real Estate Income Trust (REIT) in light of the economic uncertainty caused by the COVID-19 pandemic. Sternlicht expressed his hope that the gating of withdrawals would only be a temporary measure, lasting no more than six months.
The decision to gate withdrawals from the REIT was made in response to the unprecedented market volatility and economic uncertainty caused by the global pandemic. As businesses across the country closed their doors and millions of Americans lost their jobs, the real estate market experienced significant disruptions. In order to protect the interests of all investors in the REIT, Sternlicht and his team decided to temporarily halt withdrawals in order to avoid a fire sale of assets at distressed prices.
Sternlicht emphasized that the gating of withdrawals was a necessary measure to ensure the long-term stability and success of the REIT. By temporarily restricting withdrawals, the REIT can avoid selling off assets at depressed prices and instead wait for the market to stabilize before making any significant decisions. Sternlicht pointed out that other REITs and investment funds have also implemented similar gating measures in response to the current economic conditions.
Despite the temporary restrictions on withdrawals, Sternlicht remains optimistic about the future of the REIT. He expressed his hope that the gating would only be a short-term measure, lasting no more than six months. Sternlicht believes that once the economy begins to recover and market conditions improve, the gating will be lifted and investors will once again have access to their funds.
In the meantime, Sternlicht reassured investors that the REIT’s underlying assets remain strong and resilient. The portfolio is well-diversified and includes a mix of commercial, residential, and hospitality properties that are expected to weather the current economic storm. Sternlicht is confident that the REIT will emerge from this crisis stronger and more resilient than ever.
Overall, Sternlicht’s defense of gating withdrawals from the Starwood REIT highlights the challenges faced by real estate investors in the current economic climate. By implementing temporary measures to protect the interests of all investors, Sternlicht and his team are working to ensure the long-term success of the REIT. With a hopeful outlook for the future, Sternlicht remains committed to navigating the challenges of the current market conditions and emerging stronger on the other side.