SKN | Barry Sternlicht Says Starwood Is Poised for Asset Tokenization but Held Back by U.S. Rules

Key Points:

• Barry Sternlicht said his firm is prepared to tokenize real-world assets but faces regulatory roadblocks in the United States.

• Starwood Capital, which manages over $125 billion, sees blockchain-based tokens as a way to unlock liquidity and broaden investor access.

• Sternlicht described tokenization as superior technology and said it is at an earlier stage of development than artificial intelligence.

Real estate billionaire Barry Sternlicht says his firm is ready to bring property and other tangible assets onto the blockchain — but U.S. regulation is standing in the way. Speaking at the World Liberty Forum in Palm Beach, Sternlicht said Starwood Capital Group, which manages more than $125 billion in assets, is prepared to offer tokenized versions of real-world investments to clients.

“We want to do it right now and we’re ready,” he said, expressing frustration that American investors cannot yet easily transact traditional assets through blockchain-based tokens.

Opening Illiquid Markets Through Blockchain

Tokenization refers to converting ownership of physical or financial assets into digital tokens recorded on a blockchain. For a real estate giant like Starwood, that shift could fundamentally change how capital is raised and distributed.

By breaking large properties into digital shares, firms could give investors access to markets that are traditionally illiquid and restricted to institutional players. It could also streamline settlement, reduce administrative costs and modernize ownership records in an industry still reliant on paperwork-heavy processes. Sternlicht argued that blockchain rails could make capital markets more efficient and transparent, particularly in real estate, where transactions can take weeks or months to close.

Industry Momentum Builds

Although Starwood remains on the sidelines due to regulatory uncertainty, other players are experimenting with tokenized property models. Consulting firm Deloitte projected in a recent report that tokenized real estate could grow to $4 trillion by 2035, up from less than $0.3 trillion in 2024. Such growth would imply a rapid expansion of blockchain-based property ownership over the next decade.

Smaller platforms are also pushing forward. Propy has outlined plans to expand its blockchain-enabled property infrastructure in the United States, seeking to modernize title and settlement processes. Still, Sternlicht emphasized that large institutional adoption in the U.S. remains constrained by regulatory ambiguity.

The Technology Is Superior

Sternlicht was unequivocal in his praise for blockchain technology. He called tokenization “the future” and suggested it is still in an earlier stage of development than artificial intelligence. “This is even earlier in the physical world than AI is,” he said, describing tokenization as transformative but underutilized.

While artificial intelligence has rapidly gained mainstream adoption across industries, Sternlicht believes blockchain-based asset ownership has yet to reach its inflection point. “It’s a fantastic thing for the world,” he said. “The world just has to catch up with it.”

A Waiting Game for U.S. Clarity

For now, Starwood’s tokenization ambitions remain on hold. Sternlicht’s comments highlight a broader tension in U.S. finance: institutional appetite for blockchain innovation is growing, but regulatory clarity remains uneven.

As lawmakers and regulators continue shaping digital asset frameworks, firms like Starwood are watching closely. If barriers ease, tokenized real estate could move from experimental pilots to mainstream capital markets infrastructure.