This is a MUST WATCH clip of Barry Sternlicht speaking at a conference yesterday about the state of the real estate market. Here are the key points: -Thinks "RATES WILL COME DOWN B/C THEY'LL HAVE TO COME DOWN" -"The Fed is going to have to relent b/c they have no choice... none of the Western democracies can hold rates this high b/c they can't afford it" -Underlying fundamentals of CRE is ok -"Apartments are 95% occupied in the US. European apartment are full" -"There is only really one asset class that is really injured... almost permanent injury... US office" -Office everywhere outside the US is 'doing great' and 'full' -What we're facing right now in CRE is a balance sheet crisis -The Fed is operating off of old/outdated data -"$6 trillion of stimulus packages that were given to American consumers, they've spent it, it's mostly gone. And you can see their credit card balance going through the ceiling" -The issue with rate hikes is not the actual amount of increases, but the pace of increase -Today, the biggest victim of the rates increases is the Federal government that has to pay 5% on $33 trillion of debt -The second biggest victim is regional banks -Credit has really dried up in the US -Great opportunity for private credit and new capital -"I'll be more bullish a year from now"