Billionaire Barry Sternlicht is worried.

Is he worried that the WSJ is reporting his $10B Real Estate fund is “Bleeding Cash and Running Out of Options”? Oddly, no.

 But I guess the old “I’m not on fire, you’re on fire”  it makes some sense.

He worried about all of us—those who bank under the $250k limit of FDIC insurance and who use Regional and Community Banks. A few weeks ago on CNBC, he either predicted or warned, depending on which coverage you read, that these banks would collapse at a rate of one a week. We are in May, and this year’s only failure was also complicated by investor activism.

He is not the only one calling “Fire” in the theater.  Scott Rechler, RXR CEO,  reasoned out of the current ~4,000 banks, only 500 would survive in 2026 as the CRE loans come to maturity and rates stay high. Scott knows something about Commercial Real Estate pain.  RXR’s 340 Madison Ave received a foreclosure filing on Friday after failing to pay its $315 m mortgage when it matured earlier this year. RXR may have decided with ~40% rentable area still looking for a tenant, it wasn’t worth the fight, unlike some others in the RXR portfolio receiving extensions only after RXR handed over millions of dollars. 

As far as pain goes, WSJ reports that Sternlicht’s Starwood Capital fund is down to the last $275m on its $1.55 B LOC to fund redemptions. Starwood’s funding raising has slowed dramatically and asset divestiture isn’t a strong option. 

The ultra-wealthy Sternlicht and Rechler's complaints about the effect of higher interest rates on ROI or Cap but warning that the fabric of American society is at stake might get you invited to a few panels and a couple of media headlines.