Billionaire Barry Sternlicht, Founder, Chairman and CEO of Starwood Capital Group has issued an ominous warning about America’s regional banks, which he says will fail at a rate of ‘one or two’ per week.
Speaking with CNBC on Tuesday, Sternlicht says he thinks that primary real estate lenders – community and regional banks – are about to get whacked.
“You’re going to see a regional bank fail every day, or not — every week, maybe two a week,” he said, adding that Fed Chair Jerome Powell’s ongoing rate hikes will continue to have consequences for the real estate sector.
“He’s got a hard task with a blunt tool, and the consequence is the real estate markets are taking it on the chin because rates rose so fast. We could have handled this, but we couldn’t handle it this fast,” he said. “The 1.9 trillion of real estate loans, that’s a fragile animal right now.”
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