By Brian BandellSenior Reporter, South Florida Business Journal
Top executives from Starwood Capital Group, Whole Foods Market, Lennar Corp. and Marriott International provided key insights on the real estate market at the University of Miami’s Real Estate Impact Conference on Friday.
Over 500 people packed the Four Seasons Miami for the conference, hosted by the UM School of Architecture and the UM Business School.
Here are four insights from the UM Real Estate Impact Conference.
Economy at risk of overheating
Billionaire Barry Sternlicht, chairman and CEO of both Starwood Capital Group and Starwood Property Trust, warned that the economy is at risk of overheating, which threatens to drive up interest rates too quickly. That’s why the stock market has suffered heavy losses over the past week.
“What the government just did was completely irresponsible,” said Sternlicht, speaking the day Congress approved a budget with increased spending and a deeper deficit. “They passed a $1.5 trillion tax cut. Now they passed a $300 billion spending bill. It’s like throwing kerosene on the fires in Montecito, California.”
The economy was already doing well with low unemployment, and the tax cut will improve corporate earnings, especially in the real estate sector, Sternlicht said. The issue is that interest rates might rise faster than wages can keep up with. Companies that hold floating-rate debts could also be hurt, he added.
“Rates have to go up gently, not like that.” Sternlicht said. “The market is freaking out.”
Sternlicht is also concerned that Congress decided to increase spending primarily on the military, instead of on education and job training – areas that would have been more beneficial for wage growth.
Marriott International President and CEO Arne Sorenson said he feels positive about the economy for the short term. The tax cuts and the Trump administration’s reduction in regulation will help many businesses perform better, and they should hire more people.
“Inflation should drive wage growth, which we haven’t seen much of in many years,” Sorenson said. “The labor market is getting tighter and that causes wage pressure.”
Read the full story HERE >>>> Source: SFBJ https://www.bizjournals.com/southflorida/news/2018/02/09/real-estate-heavyweights-from-starwood-whole-foods.html