About Barry Sternlicht
Barry Sternlicht, chairman and CEO of Starwood Capital Group, discussed his company's expansion into AI data center infrastructure during an interview at the Milken Institute Global Conference. He said that Starwood has been investing in data centers for five years and is working on its first data center project in Australia, citing activity by hyperscalers in Europe and Asia. Sternlicht noted that development yields and interest rates in Australia are similar to those in the U.S. and described the firm as agnostic about geography.
Sternlicht also expressed concern about wealth disparity in the United States, stating that "half the country isn't doing so great" and that this could affect politics, real estate, and taxes. He said Starwood has "shied away from blue states lately because of their propensity to tax businesses and individuals," pointing to higher growth rates in Sun Belt states such as Nashville, Dallas, Atlanta, Raleigh, and Florida. On monetary policy, he argued that if oil prices spike, the Federal Reserve should lower rates to support interest-rate-sensitive parts of the economy like housing.
Source: AI-verified profile updated from Barry Sternlicht's recent appearances.
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✨ AI-enhanced transcript with speaker attribution
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Interviewer0:00
Last time you were here, the 10-year yield was about 15 basis points lower. You talked about inflation and the risks of an overheating economy. We've gotten some pretty decent numbers. What does Donald Trump have to be concerned about? You said if we throw too much kerosene on the economy, it can be bad. In the past six years or so, that kerosene has been lower rates and QE. What does Trump have to be concerned about the pace of his multiple stimuli?
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Barry Sternlicht0:25
It's a dangerous game. The first thing you learn in business is don't kick your banker in the face. Your banker in this case is China and Middle Eastern sovereigns that have traditionally bought our debt, our excess debt, our deficit spending. He wants to increase defense spending and do infrastructure spending, so we need revenues. We might go down before we go up in terms of tax receipts if he cuts corporate taxes and cuts individual taxes. The hope is that the economy accelerates enough that other taxes will replace those tax cuts and we'll grow. It's a leap of faith. Deregulation or re-regulation, not elimination of regulations, I think it's just too much to throw. It's like taking too many steroids at once. We're at 4.5, 4.7, 4.8, maybe it's 5.5 because we've screwed around with the employment rates. We count underemployed people as unemployed. People use six, we don't have 14% unemployment anymore. In certain industries, there are tremendous holes. Partnering, private-public mentoring programs, training people for the jobs that are available. I'm all for infrastructure spending and for deregulation to some extent, for sure. We are over-regulating and strangling certain industries like the banks. I think corporate tax cuts are useful, and simplification of the tax code would be great. Individual tax moderation, yeah. I think you may have to step it a little bit and be careful about overheating this economy. If rates rise too fast and at the same time you put trade barriers on China, they get angry at us, rates could spike suddenly hard, and that would be bad for the equity markets. If rates are going up because there's great economic growth, we're all pretty happy as long as they don't go hog-wild. We do have $20 trillion of debt, so we have to pay interest expense on that. Today we're paying $400 billion of interest expense we didn't have. We own about $6 trillion of that debt, so we're paying ourselves, but there is $14 trillion held by third parties. I think we just have to be careful. What I'm seeing right now is I actually like what I'm seeing. I'm seeing some discussion and some thoughtful give-and-take, so I think that's a good thing.
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Interviewer2:54
One area Trump is not given a ton of details yet. He started to talk about tax, he started to talk about rolling back Dodd-Frank, infrastructure. He says he wants to spend a lot, but the details of that haven't quite become clear yet. What would you like to see that could spur infrastructure and companies and private industry to get really on board with that type of spending?
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Barry Sternlicht3:13
I think it's great. Infrastructure spending is too bad we haven't done it. What you need is a lineup of projects, and then you're going to see all these products. Somebody has to comb through them and decide that these have high ROI, high return on investment. We don't need bridges to nowhere or paving the road at my summer place in Tuck at seven times. What about a wall? We probably don't need a wall. I'd rather see that go to schools and building a better school system. I don't think that's an issue. I really don't believe that's an issue, but I'm in the minority there, I suppose. Overall, I think the infrastructure spending would be great. Some of our airports are a mess, and other airports are fine.
