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Starwood Capital Group CEO Barry Sternlicht predicts a shift from artificial intelligence investments back to commercial real estate (CRE). On Starwood Property Trust REIT's earnings call, Sternlicht highlighted how federal infrastructure spending and AI hype have inflated sectors like chipmakers and data centers. He expects a rate cut from the Federal Reserve could turn the corner for CRE, with investors likely returning to multifamily and hotels. Starwood saw a positive trend with increased capital returns in July and noted a significant cash reserve. Despite missing analyst expectations, the firm remains optimistic about CRE’s future, while diversifying into sectors like infrastructure and energy.

Original article posted on August 6, 2024