Barry Sternlicht: Data centers are outpacing office buildings

Supply and Construction Trends - Apartment construction starts are projected to decrease by 65% next year [1] - Industrial construction is also down 70% [3] - Data centers are now a larger asset class in construction than office buildings in the US for the first time [3] Rental Market and Debt Issues - Rents have gone negative in many markets, contrary to expectations [2] - Many properties with construction loans may not be able to pay off their debts at maturity [2] Population and Immigration - The US has experienced a reduction in population for the first time in 250 years, negatively impacting real estate [3] - Net exporting people is a problem for many real estate markets [4] - The country needs to encourage legal immigration, which has historically contributed significantly to GDP growth [4] Investment Opportunities - Rates are coming down, presenting opportunities to buy real estate in the US at deep discounts to replacement cost, especially in office buildings [4]