Barry Sternlicht is the founder, CEO, and chairman of Starwood Capital Group, a private investment firm that specializes in real estate, hospitality, and energy. He is also the chairman and CEO of Starwood Property Trust, a public mortgage REIT that is listed on the New York Stock Exchange and managed by Starwood Capital Group.
In addition to his other roles, Mr. Sternlicht is the chairman of SH Group, a company he founded to build avant garde luxury and lifestyle brands for hotels and residential developments. These brands include 1 Hotels & Homes, Treehouse, and Baccarat. The idea behind 1 Hotels is that we are all one people who are part of one world. The brand strives to embody the ethical responsibility we have to each other and our environment as we share our planet and appreciate our surroundings.
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Born on November 27, 1960 in New York, Barry Sternlicht grew up in Stamford, Connecticut. His father, Maurycy was from Poland. Maurycy survived WWII through his young adolescence and subsequently emigrated to New York. Barry's mother, Harriet, was from New York, but born to Russian immigrants. She had a career as a stock broker. Barry was the middle child of their three children.
Barry Sternlicht would marry Mimi Riechert. They would also have three children together: two sons and one daughter. Their children have graduated from college, and they have embarked on their own careers. Barry and his wife have divorced and he now lives in Miami Beach.
After attending public high school, Barry graduated with a B.A. in Law and Society from Brown University. After graduating from Brown, he worked at Booz Allen as a consultant. He then attended Harvard Business School, obtaining an MBA in 1986.
After Harvard, Barry worked at a real estate investment firm, JMB Realty, where he befriended Neil Bluhm. In the wake of the commercial real estate market collapse in the late 1980's and a large real estate investment in London that went bankrupt, Barry found himself out of a job in 1990.
With an entrepreneurial spirit and the realization he had a window of opportunity to take the risk, Barry decided to strike it out on his own and founded Starwood Capital in 1991. He raised the capital and took advantage of the savings and loan crisis and the commercial real estate market collapse to acquire apartment buildings from the Resolution Trust Corporation. A year and a half later, he tripled his investors' money when he sold the apartment portfolio to Sam Zell's Equity Residential Property Trust.
Success in hand, he looked for opportunities to buy more real estate. This led him to Westinghouse Credit that was winding up the process of liquidating its real estate. They had a portfolio of hotels left. Barry bought them.
The acquisition of the hotel portfolio was the beginning of Barry Sternlicht's meteoric rise in the hotel industry. It put him on the path to building the largest hotel and resort company in the world, Starwood Hotels and Resorts. Mr. Sternlicht would serve as chairman and CEO of the preeminent firm from 1995 to 2005.
Starwood Hotels and Resorts rose to 895 hotels in 100 countries under Barry's leadership. Starwood's brands included Sheraton, Westin, CIGA, Four Points, The Luxury Collection, Caesars, St Regis, and W Hotels. The public company merged with Marriot in 2016.
Never having let go of Starwood Capital Group, the private investment firm he founded in 1991, Barry Sternlicht has launched into the next chapter of his life, and the next chapter in the hotel industry. Having recognized where the trends in the world are going, he has established SH Group to develop the next generation of global brands for the next generation of guests.
Born in 1960 in New York to a father who survived World War II as a boy in Europe, and a mother whose parents emigrated from Russia, Barry Sternlicht was the middle child of three boys. Growing up in Connecticut, Barry Sternlicht attended public high school.
Barry would marry a fellow student from Brown University, Mimi Reichert, and raise three children together. Their eldest son attended Dartmouth college. Their daughter attended Brown in her parent's footsteps. She is also an accomplished show jumping rider. Their youngest son pursued his education at Stanford University. Barry and Mimi are now divorced.
Barry attributes his strength and perseverance to his father, Maurycy Sternlicht. Maurycy was only 9 years old when World War II began. After expanding into Austria, Hitler set his sights on the Sudetenland, which was an area of Czechoslovakia where mostly German speaking people resided. Much to the disappointment of the Czechoslovakians, the British Prime Minister, Neville Chamberlain, conceded this area to Hitler in 1938 in the hopes he would not continue his expansion.
The following year, Hitler and the Nazis attacked Poland on September 1, 1939, followed by the Russians in the Eastern part of Poland shortly after. Fleeing on foot, the Sternlichts would encounter the Russians. Maurycy's father was sent to the Russian work camps. Maurycy would become the man of the house, continuing to the Czechoslovakian mountains with his grandmother, mother and sister. He would then fight with the partisans against the Nazis until the war ended when he was a mere 16 years old.
Maurycy Sternlicht would become an engineer and then emigrate to the United States where he would meet the woman he would marry, Harriet. Born in the United States to parents who immigrated from Russia, Harriet would pursue a Masters in Biology at Columbia University. Initially working as a school teacher, she would dedicate herself to a career as a stock broker. Maurycy would eventually go to work in his wife's office as a stock man. They would have three children together. Barry Sternlicht was the middle son of their three boys.
As Barry Sternlicht pursued his education, he also had various jobs. He briefly worked in the company his father worked at on an assembly line collecting defective flashlight bulbs. He taught tennis and sold Cutco knives door to door, as well as selling them to his tennis students. He also made money as an arbitrage trader. He is said to have had a summer job at Arvida, a real estate development company that was acquired by Disney.
Being drawn to the arts, Barry pursued a liberal arts degree from Brown University. He majored in Law and Society. Without a desire to delve deep in mathematics, he is happy to say he successfully attained his degree without having to take any math classes. Without a set curriculum, Barry had freedom to pursue the courses he was drawn to.
Upon graduating from Brown, Barry's first job out of college was at the consulting firm Booz Allen. Reflecting back on his interview at the company, he learned a very important lesson: acknowledge what you don't know. He also learned that working in consulting at Booz Allen was not what he wanted to do.
Barry wanted to continue his education. He applied to law school, but decided no to go. He recognized he didn't have the basic skills he needed in business. He applied to both Stanford and Harvard, but was accepted at Harvard Business School while being waitlisted at Stanford University. He obtained his graduate degree, a Masters in Business Administration, from Harvard Business School in 1986.
While at Harvard Business School, Barry also formed friendships and relationships at Harvard that he would draw on in his business career down the road. Fellow Harvard alumni such as Richard Nanula and Bob Faith would play key roles in Barry's rise in the investment, real estate, and hospitality businesses.
Barry's skill and expertise in business, investment, and real estate, his contacts, and his ability to identify trends and opportunities would be the foundation of the business he would build for himself down the road.
Completing his education at Harvard in 1986, Barry Sternlicht would begin his career in investment and real estate at an opportune time to acquire commercial real estate at rock bottom prices. The year he graduated was the beginning of the Savings and Loan Crisis and the collapse of the commercial real estate market.
Thrift institutions, such as savings and loan banks, were financial institutions where individuals would open savings accounts and earn interest on their deposits. The savings and loan institutions would then aggregate the deposits and loan the money to other customers, typically for mortgages so the customer could buy a home.
During the deregulation of the early 1980's, the savings and loan institutions began making a significant number of loans to investors that wanted to invest in commercial real estate. With the flood of capital into commercial mortgages to acquire commercial properties, riskier and riskier commercial real estate projects where financed by savings and loans. The commercial real estate market had also become overbuilt.
When the commercial real estate market collapsed and the investors defaulted, it brought down the financial institutions that lent on them and the investors that invested in them. The magnitude of the collapse was so great, the U.S. Federal Government was left to clean up the mess and sell all the commercial properties that reverted to the failed savings and loan institutions. The Resolution Trust Company (RTC) was created to dispose of the commercial properties.
After graduation from Harvard in 1986, Barry Sternlicht's turned down a job at Goldman Sachs. Instead, his first job out of graduate school was working for JMB Realty Corporation. JMB Realty was established in Chicago in 1970 when Neil Bluhm would join his two friends, Judd Malkin and Robert Judelson to form the commercial real estate investment and development company. Neil Bluhm would become Barry's friend and mentor.
JMB Realty proved to be very successful in identifying opportunities, raising capital, and making good returns for their investors. Notable transactions included Federated Realty Associates, the Century City real estate holdings of ALCOA, and Disney's Arvida Corporation, a real estate development company based in Boca Raton.
Barry Sternlicht had spent a summer working at Arvida. His friend from Harvard, Richard Nanula, went to work at Disney after completing his graduate degree. Logically, Barry played a key role in JMB Realty's acquisition of Arvida.
JMB's acquisition of the Randsworth Trust in 1989 was less fortunate. The Randsworth Trust owned a portfolio of office and retail properties primarily located in London. When the commercial real estate market collapsed in London, the Randsworth Trust went bankrupt. Barry was the lead analyst on the transaction.
In 1990, Barry Sternlicht was let go from JMB Realty. The perception was the failure of JMB's investment in the Randsworth Trust as the reason for Barry's departure from JMB Realty. Barry sees his departure in the context of the firm and the larger deteriorating economic conditions. The firm could not justify the large expense of its deal makers in a declining market.
Unemployed at 31 years old, Barry was going on unemployment. He was married, but didn't have any children yet, although his first son was on the way. He realized he didn't want to go through the experience of losing his job again. He knew he wanted to make enough money to not have to worry about anything, and he knew he wanted to have the means to enable his children to do whatever they wanted to do in life and be happy.
Without having the family that depended on him yet, he saw the opportunity in his situation. Being able to take the high risk to pursue the high rewards, he embarked on the entrepreneurial path that would propel him to where he is today.
Carrying forward his previous experience and expertise in the shadow of JMB Realty, Barry Sternlicht drew on his contacts to embark on his entrepreneurial path. His first step was to raise the capital. The first $1 million he raised came from his old boss.
Barry also connected with Dan Stern. Dan Stern was a money manager that dealt with the fortunes of the Ziff family (Ziff Brothers Investments) and the Burden branch of the Vanderbilt descendants (William A. M. Burden & Co.). Each family allocated $10 million. Barry had sourced a total of $21 million of capital to begin.
In the wake of the Savings and Loan Crisis and the commercial real estate market collapse, the opportunity lied in acquiring commercial real estate at bargain prices. Barry would bring Bob Faith on board in his venture. Bob Faith was a fellow student from Harvard Business School. After Harvard, Bob had begun his career at Trammel Crow in 1986 giving him a solid background in commercial real estate.
Barry Sternlicht developed an acquisition strategy that was different than that of his former boss or other institutional investors. He looked at outlier markets with solid fundamentals instead of the core markets that other large investors where attracted to. Instead of Dallas, Barry looked at San Antonio. Instead of Denver, Barry would go to Colorado Springs. He spent months researching the best markets that made the most sense and the properties that provided the best opportunity for his investors.
Barry began acquiring apartment buildings from the Resolution Trust Company. The RTC was responsible for the sale of the real estate assets of the failed savings and loan banks. His first deal was apartment building in San Francisco.
Barry would raise additional capital, eventually acquiring 8000 apartments in a year and a half. In simple terms, the apartments would be sold to Sam Zell. The majority of apartments were contributed to an UPREIT with Sam Zell's Equity Residential Property Trust. Barry's investors would triple their money.
Once their business was done, Bob Faith and Barry would part ways. Bob Faith headed to Texas to found Greystar. Barry headed East to continue under the Starwood name.
Barry Sternlicht would follow his success in apartment buildings with success in hotels. While conducting his business, he became aware that Westinghouse Credit Corporation was having problems. Westinghouse had made significant loans and investments in commercial real estate through their subsidiary. With the market collapse, Westinghouse Credit was selling off their assets in the early 1990's.
Taking advantage of the opportunity, Barry acquired a remaining hotel portfolio from Westinghouse. This acquisition launched Barry into hotels, acquiring over 8000 rooms in over 25 hotel properties before the next stage of his evolution in the hotel business.
Hotel Investors Trust, and the related Hotel Investors Corporation, was a REIT that traded on the stock exchange. The trust was originally set up in 1969 to finance the development of Marriot Hotels. In 1980, Hotel Investors was structured as a paired-share REIT and changed its name from Marriot Inn Participating Investors to Hotel Investors.
In 1994 when Hotel Investors Trust caught Barry's eye, the REIT owned 28 properties that accounted for more than 5,300 hotel rooms throughout the United States. Hotel Investors also held mortgage interests on an additional nine hotels. Barry discovered the company that was trading on the New York Stock Exchange was going bankrupt, and Barry was not one to let a crisis go to waste.
Under Starwood Capital Group, Barry's private equity company, Barry moved to acquire the debt held on Hotel Investors, initially in excess of $75 million. In addition he acquired at least one of its hotel properties.
Holding the cards on Hotel Investors Trust, Barry gained control of the company by creating an operating partnership with Starwood Capital and the REIT. Throwing in cash, Starwood Capital's hotel portfolio, and acquiring additional debt on Hotel Investors through an “UPREIT.” Barry capitalized the troubled trust, reducing its debt and shored up its balance sheet. The new name would be Starwood Lodgings Trust, This would be the beginnings of the “Starwood” brand in the world of hospitality.
The importance of the UPREIT structure was it let Barry contribute the hotels he previously acquired through his Starwood Capital Group to the REIT in exchange for stock without being taxed on the contribution. The UPREIT structure also gave Barry, and Starwood Capital Group a path to the public capital markets for the assets he acquired in his private equity firm.
In 1995, Westin Hotels was owned by Aoki Corporation. Headquartered in Seattle, Westin Hotels had 90 hotels in 23 countries including the United States, Europe, and South America. Aoki Corporation was among the many Japanese firms that made big investments in commercial real estate in the United States during the Japanese economic boom during the 1980's.
Under Starwood Capital, the private equity firm that he created to launch his entrepreneurial career, Barry worked with Goldman Sachs to acquire Westin in 1995. In 1997, Starwood Capital and Goldman Sachs would then turnaround and “roll” the assets into Starwood Lodgings Trust, the public REIT that they formed when they gained control of Hotel Investors Trust.
They would then change the name again from “Starwood Lodgings Trust” to “Starwood Hotels and Lodgings Trust.” It is Starwood Hotels and Lodgings Trust that we would know as the hotel juggernaut that would next move to acquire Sheraton Hotels.
Similar to the collapse of the commercial real estate market at the end of the 1980's that opened up the opportunity for Barry Sternlicht to acquire real estate at deep discount, the history of the Sheraton hotels ties back to the economic collapse of the Great Depression that created a similar opportunity a half century before.
Graduates from Harvard, Ernest Henderson and Robert Moore acquired investment companies at deep discount in the wake of the stock market collapse anticipating the recovery in the real estate market. They also acquired properties in foreclosure which brought them into the hotel business.
By 1937 they had acquired three more hotels in Boston. One of the hotels was named “The Sheraton Hotel.” The Sheraton Hotel had an expensive electric sign on the roof, while the other two hotels had inexpensive signs that could be replaced, hence they went with the Sheraton name for their hotel business.
Ernest Henderson would grow the company to become the largest owner of hotel properties and eventually expand into franchising. Henderson would guide the company through growth, innovation and efficiency until he passed away in 1967, which resulted in the sale of Sheraton to International Telephone and Telegraph Corporation.
ITT Corporation was founded in 1920 by Sosthenes and Hernand Behn to create an international telecommunications system. The company was successful in expanding in Europe and the Americas. As an American company, their problem was their profits were mostly overseas and difficult to repatriate.
ITT's solution was to acquire any profitable business with a potential for growth in the United States. They felt they could improve any company they could buy through their approach to management. They owned companies in diverse industries such as baking, rental cars, home construction, publishing, vending machines, auto parts, and many others. They eventually entered the hotel business with the acquisition of Sheraton.
With the run of acquisitions over decades, ITT had become heavily indebted. To improve the balance sheet, ITT began selling off businesses during the 1980's under the leadership of Rand Araskog. One of these business was ITT Sheraton.
ITT Sheraton owned, managed, or franchised 424 hotels in 62 countries throughout the world. Hilton Hotels had a keen interest in acquiring ITT Sheraton. Hilton was on a campaign for growth, and the ITT Sheraton opportunity would catapult them forward.
ITT Sheraton could also catapult Barry Sternlicht and Starwood to be the preeminent hotel company in the world. As the largest REIT in the United States, Starwood Lodging Trust would have 162 hotels in 24 countries with the Westin Hotel acquisition. If Barry could successfully acquire ITT Sheraton, Starwood could have 650 hotels in 70 countries and generate revenues of over $10 billion with a market cap of $20 billion. Its global hospitality brands would include Sheraton, Westin, CIGA, Four Points, The Luxury Collection, and Caesars.
With the stakes so high, Hilton embarked on a hostile takeover of ITT Sheraton through 1997. ITT fended off the hostile takeover from Hilton while Barry campaigned for his bid to acquire ITT Sheraton. Barry raised his bid to $10.2 billion, and shareholders voted in his favor to accept. At 37 years old, Barry was head of the largest hotel company in the world.
From 1995 to 2004/2005, Barry Sternlicht led Starwood Hotels and Resorts Worldwide as Chairman and CEO while managing Starwood Capital Group on the side. Soon after acquiring ITT Sheraton, Barry launched W Hotels in 1998.
In 1999, Barry would grow St. Regis from one hotel in New York into an international 5-star luxury hotel brand. Today there are over 50 St. Regis hotels throughout the world. In 2005, Starwood Hotels would acquire Le Meridien. There are over 120 Le Meridian hotels and resorts in Europe, the Middle East, Asia and the Pacific.
When Barry stepped down in 2005, he went back to focus his attentions on Starwood Capital Group. Starwood Hotels and Resorts would eventually merge with Marriot in 2016.
Back in the investment business at Starwood Capital Group, Barry launched a new REIT, the Starwood Property Trust. The REIT went public in an IPO in August of 2009 under the stock symbol STWD.
As a mortgage REIT, the Starwood Property Trust is involved in originating real estate loans, as well as acquiring, financing, and managing them. In addition to real estate, they also finance infrastructure projects, particularly as they relate to renewable energy. In addition to mortgages, they can also invest in real estate on the equity side.
Starwood Property Trust is also involved in the mortgage backed securities business. Their business includes servicing, securitization, and “selectively” acquiring underlying assets for both commercial (CMBS) or residential (RMBS) mortgage backed securities. .
In 2008, Barry Sternlicht launched SH Group to develop hospitality brands that embody the trends of the next generation of guest. Today's world is interconnected, and the current and next generation of consumers are more environmentally and socially conscious than ever before.
To harness the trends of increasing demand for sustainability, Barry has launched 1 Hotels to meet the consumer and lead the way forward in offering luxury in a way that is environmentally responsible and in sync with the conscience of their guests.
Along the same lines, classic luxury brands can be associated with the past, but luxury is still in demand. Baccarat is a 250 year old brand that has been brought forward in a way that offers timeless excellence and luxury to a clientele with today's sensibilities.
