Starwood Said to Start Pitching New Distressed Real Estate Fund

Starwood Capital Group, the firm led by Barry Sternlicht, is in preliminary talks with potential investors for a new opportunistic real estate fund, according to people with knowledge of the matter.

A new vehicle, which hasn’t formally launched, would follow the company’s Starwood Distressed Opportunity Fund XII, which closed in October 2021 with more than $10 billion in commitments, said the people, who asked to remain anonymous citing private information.

Sternlicht has said that the company’s employees are “foaming at the mouth” to seize on mounting distress in the commercial-property market. The rise in borrowing costs has pressured property ...