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Speaker 1: I'm Ed Baxter and I'm Denise Pelguini.

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Speaker 2: In this episode, we hear from Barry Sternlick, who is

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Speaker 2: chairman of the Starward Capitol Group.

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Speaker 1: That's right in Sternlicht, of course, the billionaire investor who

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Speaker 1: built a reputation really as a bargain hunter in financially

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Speaker 1: turbulent times.

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Speaker 2: That's right, Denisen. He scooped up distressed assets in the

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Speaker 2: aftermath of the US savings and loan collapse and later

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Speaker 2: in the Great Financial Crisis.

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Speaker 1: Yeah, he sure did, and he is eyeing opportunities again

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Speaker 1: as the sharp increase in interest rates really kind of

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Speaker 1: deflates commercial real estate values.

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Speaker 2: That's an understatement, So I guess the question is what's

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Speaker 2: in his sights. Now here's David Rubinstein with Sternlett Let's

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Speaker 2: listen in.

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Speaker 3: Now you've been critical.

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Speaker 4: I think it's fair to say of the Federal reservear

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Speaker 4: you feel that they raised interest rates too much, too quickly.

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Speaker 4: What should they have done in response to COVID when

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Speaker 4: COVID came along.

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Speaker 5: I would say that I'm empathetic to the situation of

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Speaker 5: Drome Powell because you have a government that's spending money

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Speaker 5: hand over fist and then you have the FED trying

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Speaker 5: to break an economy. And I'm critical of Powell because,

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Speaker 5: as you may know, they use a portion of the

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Speaker 5: data they uses quite lagging, and they didn't see inflation

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Speaker 5: when it was here. And when they showed up, they

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Speaker 5: showed up late and big. They went straight vertical on rates.

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Speaker 5: We had to increase rates. We should have done them

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Speaker 5: much earlier. He shouldn't have negative interest rates. He shouldn't

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Speaker 5: been buying mortgages into May of twenty two. That should

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Speaker 5: have stopped so much earlier that we didn't need him

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Speaker 5: to do that. But when he finally stopped, he went

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Speaker 5: the other direction, and he went so far, so fast,

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Speaker 5: And I'm saying, just wait.

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Speaker 4: Your view is, because of the kind of things you

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Speaker 4: see coming, we will go into a recession in the

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Speaker 4: United States, And your view, yeah, and any way to

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Speaker 4: avoid it at this point or not?

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Speaker 3: Really.

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Speaker 6: It's interesting.

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Speaker 5: One of my friends had a meeting with one of

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Speaker 5: the governors recently last week and they're like, we hear

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Speaker 5: all this noise about the real estate, but we don't

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Speaker 5: see the issues they're going to come and there is

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Speaker 5: going to be a serious credit contraction the country in

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Speaker 5: any asset class has not adjusted to that cost of

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Speaker 5: capital yet, but it's coming. The economy will slow. You

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Speaker 5: can see the numbers. CEO confidences down, consumer confidences down,

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Speaker 5: Retail sales are down. Service economy is wickedly strong. It

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Speaker 5: feels like the last gas before the we actually settle

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Speaker 5: into what should be what you'd expect to be. I

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Speaker 5: hope it's a shallow recession. I hope he can pull

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Speaker 5: that off.

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Speaker 4: Normally, when you increase interest rates, you decrease GDP growth,

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Speaker 4: and you increase unemployment. Your point is, unemployment's not going

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Speaker 4: up because the statistics aren't really covering the people who

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Speaker 4: are really being laid off.

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Speaker 5: Unemployment isn't going up because structurally, interest rates aren't affecting

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Speaker 5: the labor market the way they would normally affect the

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Speaker 5: labor market. You have the offset and construction from the

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Speaker 5: infrastructure bill, and you have the service sector, which is

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Speaker 5: still recovering the pandemic, which normally would be tilting over.

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Speaker 3: Let's go back to your beginning. So where were you born?

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Speaker 6: Somewhere on Long Island.

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Speaker 3: I think, okay. And where'd you go to high school?

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Speaker 6: I went to no.

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Speaker 5: I moved to Connecticut when I was five or six

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Speaker 5: with my parents and went to public high school, Westill

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Speaker 5: High School, like two thousand kids.

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Speaker 4: You did recently, Well, you went to Ivy School, you

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Speaker 4: went to Brown Tract and you were a superstar there,

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Speaker 4: or you were an athlete, or you're a great student.

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Speaker 5: Dave Brown was a liberal arts college in Brown. I

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Speaker 5: credit with teaching me how to think. I think I'm

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Speaker 5: a generalist thinker. I think a lot of my job

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Speaker 5: has evolved into being sort of thinking about trends and

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Speaker 5: macro situations and trying to direct our investment strategy.

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Speaker 4: You went to Harvard Business School, So what did you

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Speaker 4: do that attracted Harvard Business School to you?

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Speaker 5: Well, as I got a job. When you don't know

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Speaker 5: how to do anything, you become a consultant. So I

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Speaker 5: got my first job out of Brown was booz Allen

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Speaker 5: and I worked there for a year. I had some assignments,

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Speaker 5: and then in my roommate was working at arbitrage from

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Speaker 5: on Wall Street and he was like, do you want

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Speaker 5: to come here?

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Speaker 6: And I'm like yes, So I want to go to trade.

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Speaker 5: So I traded the breakup of AT and T.

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Speaker 6: I made a lot of money.

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Speaker 5: They told me I get ten percent of the profits.

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Speaker 5: I made for the firm. I could calculate how much

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Speaker 5: money that was. I was a lot of money back

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Speaker 5: in those days, a couple hundred thousand bucks. I think

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Speaker 5: they paid me fifty and I said, I don't want

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Speaker 5: to do this is not a fair So I applied

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Speaker 5: to two business schools.

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Speaker 6: I got in.

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Speaker 5: I never thought i'd get in. I didn't take a

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Speaker 5: math course in college, and so I couldn't get a

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Speaker 5: job on Wall Street coming out of HBS because I

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Speaker 5: had no experience on being on the street and they

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Speaker 5: I wound up getting an offer from Goldman Sachs in

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Speaker 5: the real estate group. But I also got this phone call.

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Speaker 5: I went to visit this from I never heard of,

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Speaker 5: called JAMB in Chicago. So I was intrigued and it

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Speaker 5: seemed like a fun city, and I thought I tried

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Speaker 5: something new, So I went to Chicago.

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Speaker 4: So you were downsized by JMB. So did you call

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Speaker 4: your mother and say I should have gone to law

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Speaker 4: school or what happened?

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Speaker 6: No?

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Speaker 5: I was friendly downsized. My boss, Neil Bloom, said he'd

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Speaker 5: invest in me in my new company, whatever it was.

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Speaker 5: And I wasn't sure. I wanted to do real estate,

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Speaker 5: but it was the time of the form of the

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Speaker 5: SNL crisis, and I decided I'd met some people in

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Speaker 5: over the last couple of years at that time that

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Speaker 5: said they backed me, and I recruited a friend from

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Speaker 5: business school who worked at the Trimbill Crow Companies to

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Speaker 5: be my partner because I was the acquisition guy and

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Speaker 5: he'd be the operations guy. And we went out and

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Speaker 5: bought eight thousand units apartment units because the only thing

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Speaker 5: we could buy our apartments. Because we didn't have a

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Speaker 5: lot of money and we were very successful. We in

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Speaker 5: eighteen months, we decided we'd sell the assets and we

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Speaker 5: sold them to Sam Zel and tripled our money.

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Speaker 4: So the company you started eventually became Starward. Starwood is

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Speaker 4: in many different businesses. You were in the lodging business,

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Speaker 4: you're in the lending business. You're in the investment in

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Speaker 4: office building and residential business. Right, yeah, so you do

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Speaker 4: these through different vehicles. So let's go through the lodging

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Speaker 4: part first. Before you got too well known in the

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Speaker 4: real estate world, you did make a very well known

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Speaker 4: real estate acquisition in hotels and lodging when you weren't

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Speaker 4: that well known.

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Speaker 3: You bought Western Actually, if you were well known.

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Speaker 5: No after we sold those apartments to Sam. We said

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Speaker 5: what else should we buy? And because prices had run

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Speaker 5: pretty far for apartments, and we went to see a

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Speaker 5: group called Westinghouse was having a going out of business

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Speaker 5: sale and I said, do you have any apartments?

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Speaker 6: They said no.

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Speaker 5: I said you have any lands? We started buying land.

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Speaker 5: They said no, do you have any hotels? And they said, yeah,

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Speaker 5: this is a portfolio we have. We were it's under

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Speaker 5: contract to a group in Boston, but it hasn't closed yet.

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Speaker 5: So I went to see that fellow check Hill in Memphis, Tennessee,

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Speaker 5: and I convinced them that we would be more fund

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Speaker 5: So I took control of the company by buying the

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Speaker 5: debt and then folded in a whole bunch of our

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Speaker 5: assets into that company, and that became Starwood Hotels. We

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Speaker 5: changed the name first to Starward Lodging, and it had

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Speaker 5: eight million dollars market cap in three years. I think

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Speaker 5: it was five billion. That company bought Weston Hotels in

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Speaker 5: ninety five, which we actually had bought privately with Golden Sachs,

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Speaker 5: and we took a public We bought it into Starwood Hotels.

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Speaker 5: Now we were seven billion dollar company, and in nineteen

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Speaker 5: ninety eight, I made a bid for itt shared And,

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Speaker 5: which was a fourteen billion dollar company when I was

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Speaker 5: thirty eight. I now had a company with one hundred

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Speaker 5: and twenty thousand employees in eighty countries and nine billion

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Speaker 5: dollars of debt.

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Speaker 6: So I'm like, what on earth did I just do?

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Speaker 4: You built one of the largest hotel lodging companies in

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Speaker 4: the world, the biggest in the world based on cash flow,

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Speaker 4: but you ultimately sold it.

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Speaker 6: I left.

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Speaker 5: I kind of done everything I wanted to do. I'd

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Speaker 5: launched and started W Hotels. I turned Saint Regis into

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Speaker 5: a brand, and I kind of wanted to go back.

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Speaker 6: To the private world. I was tired of being a

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Speaker 6: public company CEO.

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Speaker 5: So I left and went back to Starwood Capitol Group,

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Speaker 5: and then that business took off and grew.

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Speaker 4: So do you come up with the ideas for these

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Speaker 4: new hotel concepts?

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Speaker 3: Yeah, that's my thing.

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Speaker 6: Oh no, I do that.

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Speaker 3: So what was the.

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Speaker 4: Idea behind back Round? I'm familiar with. So I was

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Speaker 4: a luxury kind.

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Speaker 6: Of brand and instant brand recognition, and W was more hip. Yeah.

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Speaker 5: At the time, I I was friends with Ian Schrager

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Speaker 5: and he done these hotels, but with the Mandre on

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Speaker 5: the Delano. But there were one offs and I thought

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Speaker 5: we could do a branded boutique, which nobody thought you

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Speaker 5: could do. The first one was here in New York.

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Speaker 5: It opened in nineteen ninety eight, I think it was.

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Speaker 5: And it's a w on leg behind the Woldor and

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Speaker 5: the analysts from Crudential Securities. I'll never forget this. We're

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Speaker 5: walking through the lot because what are you going to

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Speaker 5: do when W doesn't work? And W worked? It was

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Speaker 5: It was cool, but not ultra cool. It was comfortable

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Speaker 5: though it was supposed to be comfortable. And there's an

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Speaker 5: I outsourced restaurant. It's a real restaurant tours offending the

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Speaker 5: entire hotel industry.

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Speaker 4: What's the appeal to you of the lodging industry? You're

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Speaker 4: like the creativity of creating the brands or what is it?

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Speaker 4: And is the industry in good shape now? People coming

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Speaker 4: back and going to hotels again because travels back.

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Speaker 5: Well, it's a place where I can express my own creativity.

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Speaker 5: I entered real estate for that because I wanted to.

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Speaker 5: I wanted to, you know, it's a physical expression. I

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Speaker 5: we built the Baker out here in New York, so

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Speaker 5: it's fun to see your your vision come to life.

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Speaker 4: So let's talk about your other business, which is the

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Speaker 4: non lodging business. So you are one of the best

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Speaker 4: known and one of the best real estate investors in

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Speaker 4: our country. Right now, many people think the real estate

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Speaker 4: market's going to be in trouble because high interest rates

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Speaker 4: are making it more and more difficult for people to

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Speaker 4: service their loans and we're going to have a lot

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Speaker 4: of defaults shown.

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Speaker 3: What do you think about that observation?

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Speaker 5: Anything with a fixed income stream is worthless when rates rise,

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Speaker 5: and the underlying fundamentals and most of the acid classes

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Speaker 5: in real.

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Speaker 6: Estate are okay right now in the United States.

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Speaker 5: The apartment market, the industrial logistics market, the hotel markets,

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Speaker 5: those are all in good shape. But there's no question

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Speaker 5: that the FED has reacted dramatically to try to slow

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Speaker 5: the economy down quite late, obviously, and that has impacted

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Speaker 5: real estate values, yields on properties or moving up to

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Speaker 5: reflect this higher interest rate, and the supply of credit

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Speaker 5: to the industry is curtailed dramatically. So I like to

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Speaker 5: say it's a hurricane over real estate right now. We're

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Speaker 5: in the Category five hurricane and it's sort of a

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Speaker 5: blackcout hovering over the entire industry until we get some

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Speaker 5: relief or some understanding of what the Fed's going to

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Speaker 5: do over the longer term.

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Speaker 3: COVID had the effect of letting people work at home.

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Speaker 4: So now people that are saying come back to work

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Speaker 4: your offices and a lot of employees are saying, I'd

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Speaker 4: rather work at home. So people are begging them to

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Speaker 4: come in two days, three days a week. So it's

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Speaker 4: just going to mean in the end that we're going

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Speaker 4: to change the way office buildings are really value in

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Speaker 4: the future because they're not going to need as much

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Speaker 4: space for them for their tenants.

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Speaker 3: Do you think that's true?

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Speaker 4: What do you think eventually the tenants will come back

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Speaker 4: and the employees will come back.

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Speaker 5: First of all, the work from home phenomenon, there is

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Speaker 5: a US phenomenon if you go to England or Germany.

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Speaker 5: It was just we have some investments of off shore

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Speaker 5: and I was just looking at rents are up in

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Speaker 5: vacancy rates in the top your German property markets Berlin, Frankfort, Munich,

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Speaker 5: Homberg are less than five percent. People are back in

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Speaker 5: the office. You and I go to the Middle East,

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Speaker 5: they're full. We have offices in Asia, they're full. So

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Speaker 5: this is a US situation. In the US, you have

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Speaker 5: two markets. You have the really nice buildings that are

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Speaker 5: ESG compliant, that are lovely, like the one we're sitting in.

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Speaker 5: This place is buzzing, and they're back because it's a

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Speaker 5: fun place to be. And if you're in a building

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Speaker 5: with lots of cubicles and it's dark and there's no

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Speaker 5: life in love so nice buildings. Even in the city

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Speaker 5: is as currently destitute as San Francisco. From an office

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Speaker 5: market perspective, the best buildings are still leased, and so

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Speaker 5: you're going to see a bifurcation of the market in

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Speaker 5: office The nice buildings will stay rented and my guess

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Speaker 5: is at pretty good rates, and the B and C

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Speaker 5: stuff is.

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Speaker 3: Going to be.

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Speaker 5: Maybe fields of grain or something will be very pretty well.

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Speaker 5: Have all these little mid block parks in New York

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Speaker 5: City because there won't be anything else to do with

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Speaker 5: those buildings, and nobody will carry them because there's no hope.

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Speaker 5: Some of the cities that have issues on commuting, like

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Speaker 5: New York or La Downtown, La Downtown San Francisco, the

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Speaker 5: CBD that are difficult to commute to, that's where the

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Speaker 5: pressure is so hard from workers saying I don't want

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Speaker 5: to drive into the city an hour and a half

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Speaker 5: and drive home an hour and a half every day.

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Speaker 5: But I also think a nice little recession will clear

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Speaker 5: this and you'll see people come back to the office

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Speaker 5: and I was in your town. Take the Amazon HQ two.

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Speaker 5: They're expecting people in those offices four days a week.

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Speaker 6: Come the fall.

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Speaker 5: So the other thing about office David is AI is

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Speaker 5: going to hit a couple of these industries that have

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Speaker 5: been big users of office space.

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Speaker 4: You think artificial intelligence is obviously coming, but what industries

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Speaker 4: you think will be most effective.

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Speaker 5: Legal is probably the number one industry that could be

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Speaker 5: disrupted by AI. You can search every precedent in the

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Speaker 5: history of mankind with a machine. You don't need a

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Speaker 5: paralegal to do that anymore, and they'll write the brief

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Speaker 5: for you.

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Speaker 6: So the legal profession is probably target one.

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Speaker 5: Not far behind is advertising, when the machine is going

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Speaker 5: to update advertising and keep bombarding you with more and

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Speaker 5: more ads, with more and more offers until you take one.

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Speaker 6: So humans won't be there.

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Speaker 5: They'll be maybe guiding it, but it'll be it'll change advertising.

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Speaker 5: It's another big user of space. Finance you tell me,

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Speaker 5: I mean, there's buttons now on your computer. They'll be

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Speaker 5: running a lot of the stuff for you. So it

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Speaker 5: could fundamentally shake up permanent demand.

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Speaker 3: For office now.

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Speaker 4: Sometimes people are saying that the best investment opportunity now

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Speaker 4: is to stress real estate debt, that you can buy

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Speaker 4: the debt from banks, shut discount and so forth.

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Speaker 3: But you think it's too early for that.

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Speaker 5: They're just beginning to you know, we were going to

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Speaker 5: give back an office building, and they said, well, not

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Speaker 5: so fast. If you want to, we'll restructure of a

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Speaker 5: loan and we'll cut it the loan in half, and

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Speaker 5: you put the money in here, and we'll take this

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Speaker 5: as a junior note.

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Speaker 6: Because the banks don't want the assets back.

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Speaker 4: And why don't they want them back because they think

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Speaker 4: it's going to go down even further.

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Speaker 5: Yeah, because they got to carry them. They're not set

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Speaker 5: up to carry these assets right, and they got to

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Speaker 5: go hire someone. They got to go deleasing themselves. It's

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Speaker 5: not their business. They'd rather have a GP like your

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Speaker 5: old firm Carlisle or Starwood or Blackstone, hold onto the

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Speaker 5: asset and try to work it out.

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Speaker 4: So a lot of fortunes were made in the real estate.

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Speaker 4: We're all seven oh eight when people bought distressed real estate,

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Speaker 4: and all like eighties two when the RTC was here.

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Speaker 4: So do you see funds being formed to buy these

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Speaker 4: assets but you think they won't be available for a

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Speaker 4: year or two.

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Speaker 5: Well, right now, you have an unusual situation in the

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Speaker 5: real estate market. It's because everyone's sort of looking at

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Speaker 5: the yield curve and it says rates will be lower later.

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Speaker 5: Everyone says, you know, survive till twenty five onto your assets.

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Speaker 5: So transaction volumes have plummeted. Nobody's trying unless you have

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Speaker 5: to sell something today. Nobody wants to sell anything today.

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Speaker 5: They think tomorrow will be rosier. So for the most part,

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Speaker 5: everybody's pushing any sales back. And I think transaction buys

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Speaker 5: in apartments are down sixty percent, industrial down seventy percent.

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Speaker 5: It's going to it's a very dry you know, there's

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Speaker 5: no IPOs and there's no sales in housing.

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Speaker 4: Do you see a recession there because prices are going

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Speaker 4: to come down at some point, or you don't see

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Speaker 4: a recession in housing.

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Speaker 5: I think the housing markets had a very unusual situation

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Speaker 5: where powells increase in rates has diminished supply and people.

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Speaker 5: And I'm not sure we've ever had a situation where

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Speaker 5: so many people have locked that have locked in their

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Speaker 5: mortgage costs. So right now people are sticking in their house,

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Speaker 5: which has diminished the supply of homes for sale. I

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Speaker 5: wonder when rates come down, homes will be sold like

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Speaker 5: people will start because the mortgage will no longer be

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Speaker 5: a reason to hold onto the house, and that will

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Speaker 5: offset will probably be an increase in supply as the

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Speaker 5: bilities resume a more normal cycles. So maybe the housing

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Speaker 5: market just stagnates for a while, but over time it's

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Speaker 5: headed up.

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Speaker 4: I suppose I'm gonna invest in real estate, and I'm

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Speaker 4: not a wealthy person, but I have some money. Should

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Speaker 4: I buy us a publicly traded share in a you

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Speaker 4: operate a red businesses.

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Speaker 6: That's one public and one private.

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Speaker 4: Is that a good business to be in terms of

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Speaker 4: operating it? Is it a good thing for people to

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Speaker 4: now invest in a read?

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Speaker 6: Yeah?

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Speaker 5: Like, I think real estate has a has a nice

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Speaker 5: place in the balance sheet of any individual. But I

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Speaker 5: think the reads in general in here will look really interesting.

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Speaker 5: And we in the pandemic, we raised a special situations

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Speaker 5: fund and bought fifteen names in the read business, and

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Speaker 5: we were up like seventy percent at one point.

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Speaker 6: We're gonna do that again.

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Speaker 5: We I think if you take a long term view,

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Speaker 5: some of these good companies, or they're good companies with

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Speaker 5: the wrong interest rate environment even I wouldn't even say

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Speaker 5: they have the wrong balance sheet, but they are so

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Speaker 5: out of favor every day you pick up you turn

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Speaker 5: on the news. In real estate, real estate, real estate,

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Speaker 5: there's some really good buys out there.

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Speaker 4: You were based in the northeast part of the United

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Speaker 4: States for much of your career.

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Speaker 3: You grew up in Connecticut. You're born in Long.

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Speaker 6: Isand based my family mostly in Connecticut.

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Speaker 4: Okay, but you picked up and moved to Miami. Why

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Speaker 4: did you do that a few years ago? And any

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Speaker 4: regrets about moving to Miami.

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Speaker 5: Well, my mom's down there and I got divorced. That

385
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Speaker 5: was one reason to change your life start over. There

386
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Speaker 5: was obviously a tax benefit to doing so, and I

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Speaker 5: sold an interest in my firm. At the time, I

388
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Speaker 5: was based in Connecticut. I was based in Granwich. Our

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Speaker 5: headquarters was.

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Speaker 4: At that time before COVID. People said Barry, you're moving

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Speaker 4: to part of the world. Was that people was thinking

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Speaker 4: you were a little bit strange.

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Speaker 6: Well, yes they did.

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Speaker 5: I didn't think it'd be that hard to move and

395
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Speaker 5: make that my base of operations. It turned out I

396
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Speaker 5: caught the wave perfectly. I was an early settler into Miami,

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Speaker 5: and you know, the home prizes probably tripled there.

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Speaker 6: I should have just bought all. I shouldn't have traveled

399
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Speaker 6: the world. It should have bought everything with my house.

400
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Speaker 6: I would have had the best performing real estate fund

401
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Speaker 6: in the world.

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Speaker 4: President of United States calls you and says, you're a

403
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Speaker 4: smart guy. I need a Secretary of Treasury who knows

404
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Speaker 4: real estate. And you know who's a Democrat. I assume

405
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Speaker 4: you're a Democrat.

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Speaker 6: I put myself as an independent right now.

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Speaker 4: But if a president, any president of any party, then

408
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Speaker 4: called you, would you ever go into government or you're

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Speaker 4: a private sector person.

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Speaker 6: I always serve the nation.

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Speaker 5: I would I think that, you know, I do think

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Speaker 5: the government could use a few business people. And despite

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Speaker 5: the lack of love we may have for us, I

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Speaker 5: think the government has to treat itself a little like

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Speaker 5: a corporation. They have a budget and they have limited resources.

416
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Speaker 5: Now you have a thirty two trillion dollar deficits, so

417
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Speaker 5: you have to figure out what you need to get

418
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Speaker 5: done versus what you'd like to get done. There are

419
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Speaker 5: so many benefits to being unemployed, and there's so many

420
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Speaker 5: support systems that I think some people say, ill work

421
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Speaker 5: part time and collect my unemployment benefits. Thirty one percent

422
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Speaker 5: of our housekeepers we cannot find. We're paying fifteen dollars

423
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Speaker 5: an hour. We used to be paying nine and now

424
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Speaker 5: we're and there are benefits, and they don't they're not there.

425
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Speaker 5: They're not there, So we those people are probably some

426
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Speaker 5: of these people that may be hanging out unemployment ranks

427
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Speaker 5: were getting all kinds of subsidies. And we need the

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Speaker 5: government to say if if you have a hardship and

429
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Speaker 5: we understand.

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Speaker 6: Will help you.

431
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Speaker 5: But we should educate people, We should get train them

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Speaker 5: for jobs and bring a back to the productive society.

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Speaker 3: What is the best investment advice you've ever received, HM.

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Speaker 5: I was talking to one of the most successful hedge

435
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Speaker 5: fund managers in the United States, and he said, I

436
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Speaker 5: expected him to tell me about some horrific investment he

437
00:18:36,680 --> 00:18:38,760
Speaker 5: made me lost all his money, he said, not selling

438
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Speaker 5: my winners too early. And I think about that all

439
00:18:41,640 --> 00:18:44,720
Speaker 5: the time. But human nature, even in running a stock

440
00:18:44,760 --> 00:18:47,959
Speaker 5: portfolio is to take your gains and hold your losses

441
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Speaker 5: hoping they come back to par. And the same thing

442
00:18:50,240 --> 00:18:52,520
Speaker 5: applies to real estate. You know, we want, oh we

443
00:18:52,600 --> 00:18:54,520
Speaker 5: got a high IRR on this deal, we'll sell this

444
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Speaker 5: asset pocket the forty seven i RR. And our bad

445
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Speaker 5: deals we'll just hopefully they'll we'll make our money back.

446
00:19:01,119 --> 00:19:03,720
Speaker 5: And you know this from Karla. We spend all our

447
00:19:03,760 --> 00:19:07,040
Speaker 5: time on the bad deals. And so I think that

448
00:19:07,119 --> 00:19:09,600
Speaker 5: has been We had a portfolio of company that we

449
00:19:09,600 --> 00:19:11,560
Speaker 5: were going to sell and we made nine hundred million

450
00:19:11,600 --> 00:19:13,399
Speaker 5: dollars and I said, We're not selling it. My partners

451
00:19:13,440 --> 00:19:16,480
Speaker 5: were furious, but this one I had done this deal,

452
00:19:16,520 --> 00:19:18,119
Speaker 5: so I said I'm holding this and we sold it

453
00:19:18,200 --> 00:19:19,480
Speaker 5: four years later and made a billion.

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Speaker 4: Four all right, what do you think the most common

455
00:19:21,560 --> 00:19:25,440
Speaker 4: mistake that investors make? The average investor most common mistake.

456
00:19:25,359 --> 00:19:29,439
Speaker 5: That they sell their gains too soon and they hold on,

457
00:19:29,560 --> 00:19:31,560
Speaker 5: they don't cut their losses, and they hope things will

458
00:19:31,600 --> 00:19:33,760
Speaker 5: get better, when hope is not a business strategy.

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00:19:34,200 --> 00:19:36,280
Speaker 4: So if your mother came to you and said, I

460
00:19:36,320 --> 00:19:38,800
Speaker 4: have one hundred thousand dollars I need to invest it

461
00:19:38,880 --> 00:19:41,080
Speaker 4: somewhere where should I invest it?

462
00:19:41,080 --> 00:19:44,600
Speaker 3: You would say, where real estate well today?

463
00:19:44,600 --> 00:19:46,359
Speaker 5: And if you look at my portfolio, I mean I

464
00:19:46,400 --> 00:19:48,320
Speaker 5: have a significant amount of cash that I never had

465
00:19:48,400 --> 00:19:50,399
Speaker 5: before because I'm getting five percent for the cash.

466
00:19:50,560 --> 00:19:52,760
Speaker 4: So as you look back on your career, what would

467
00:19:52,800 --> 00:19:55,080
Speaker 4: you say you're most proud of. It's building one of

468
00:19:55,119 --> 00:19:57,639
Speaker 4: the biggest real estate companies in the United States and

469
00:19:57,680 --> 00:20:01,200
Speaker 4: the world. You're a philanthropic actvities, your children. What is

470
00:20:01,240 --> 00:20:02,640
Speaker 4: you're most proud of having achieved?

471
00:20:02,640 --> 00:20:04,359
Speaker 5: Start with my kids. I mean, I'm happy with my

472
00:20:04,359 --> 00:20:08,479
Speaker 5: three children. That's your legacy. Really for me, building Starwood

473
00:20:08,520 --> 00:20:12,600
Speaker 5: Hotels not only were the best performing large hotel company

474
00:20:12,600 --> 00:20:14,280
Speaker 5: of the ten years I ran the company, I won

475
00:20:14,800 --> 00:20:18,560
Speaker 5: a best Lodging Executive in the country in Institutional investment

476
00:20:18,600 --> 00:20:21,320
Speaker 5: magazine Displacing I think six years that Bill Marry had

477
00:20:21,320 --> 00:20:21,840
Speaker 5: had that award.

478
00:20:22,960 --> 00:20:23,520
Speaker 6: But I built a.

479
00:20:23,480 --> 00:20:25,720
Speaker 5: Company with a good soul and that was the untold

480
00:20:25,760 --> 00:20:28,440
Speaker 5: story of Starwood. Because we had to do I said,

481
00:20:28,480 --> 00:20:30,480
Speaker 5: I wanted our hotels to be the shining light in

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00:20:30,560 --> 00:20:33,240
Speaker 5: each community we served, and I made our people give

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00:20:33,280 --> 00:20:34,200
Speaker 5: back to the communities.

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Speaker 1: And that was Barry Stern Look, chairman of the Starwood

485
00:20:37,240 --> 00:20:40,160
Speaker 1: Capitol Group on Blomberg Wealth with David Rubinstein,