In early 1991, 31-year-old Barry Sternlicht was out of a job. Seven years later, he was the chief executive officer of the largest hotel company in the world. Along the way, Sternlicht not only completed one of the most dramatic comebacks in the history of the asset class, he also created one of its most successful deals.
Following a stint at JMB Realty, where he led the firm's disastrous investment in UK property company Randsworth Trust, Sternlicht launched Starwood Capital in 1991. Four years later, the firm acquired Hotel Investors Trust, a near bankrupt REIT, in a deal that some observers would later call “the buy of the century.” By utilizing the hotel company's advantageous tax structure, Sternlicht was able to go on an aggressive acquisition spree and turn an investment of $83 million into Starwood Hotels & Resorts, a company with a current market cap in excess of $12 billion.
“I went into hotels because I really thought it was the right asset class to go into at the time,” Sternlicht told PERE last year. “Nobody wanted them.”
Today, of course, the landscape is significantly different, due in large part to Sternlicht himself. Yet while private equity and real estate investors pile into the hospitality industry, Sternlicht is still hoping to retain his Midas touch. Following last year's acquisition of the European hospitality company Société du Louvre, Sternlicht is developing an international luxury brand of hotels, Le Crillon, based on the company's famed Hotel de Crillon in Paris.