Sternlicht’s Starwood Capital Said to Explore Stake Sale

Starwood Capital Group LLC, the real estate investment firm led by Barry Sternlicht, is considering the sale of a minority stake in the company, according to a person with knowledge of the situation.

The Greenwich, Connecticut-based company, which manages assets of almost $20 billion, hired Morgan Stanley (MS) as an adviser, said the person, who asked not to be named because the information is private.

Tom Johnson, a spokesman for Starwood Capital, and Pen Pendleton, a spokesman for Morgan Stanley, declined to comment.

Starwood would join other private investment firms that have sold stakes to cash out founders or set a value for the company before going public. Carlyle Group LP (CG), before its initial public offering in May, had sold stakes to Abu Dhabi’s Mubadala Development Co. and the California Public Employees’ Retirement System. Blackstone Group LP, as part of its 2007 IPO, sold a minority nonvoting stake to China Investment Corp.

Sternlicht was chairman and CEO of Starwood Hotels & Resorts Worldwide Inc., a company he founded, from 1995 to 2005. In 1991, he created Starwood Capital, a firm whose investments have included the Carlyle Hotel in New York and the Paramount Bay residential tower in Miami, according to the company’s website.

Starwood’s exploration of a stake sale was reported earlier today by the Wall Street Journal.

To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net