The possible destruction of the U.S. economy must be weighed against the diminishing health risks from the coronavirus, real estate mogul Barry Sternlicht told CNBC on Tuesday.
“I actually think we have to reopen the economy. We have to do it ZIP code by ZIP code,” said Sternlicht, whose $ 60 billion Starwood Capital Group has interests in luxury hotels and malls among its many other businesses. “We have to get going. The cost is too great. The government can’t carry a $ 23 trillion economy.”
Sternlicht’s call to action comes as more states run by Republican governors are announcing plans to reopen parts of their economies as new daily virus cases in the U.S. continue to slow.
Georgia’s timetable — one of the most aggressive in the nation — would allow gyms, hair salons, bowling alleys and tattoo parlors to reopen Friday. Elective medical procedures would also resume. By Monday, movie theaters and restaurants could start up again.
“You have to look at the social cost against the human cost, which I know is awful,” Sternlicht said on “Squawk Box.” “There’s a financial suicide and a death of small businesses and restaurants and the economy and the global economy that has to be weighed.”
The state stay-at-home orders and closures of nonessential businesses have led to a massive spike in unemployment. More than 22 million Americans filed for initial jobless claims in the past four weeks alone, basically wiping out all the jobs created in the 10 years since the Great Recession.
Last month, Sternlicht said he supported President Donald Trump‘s push to reopen the economy, while he expressed unbridled optimism about the chances for recovery in the economy and the stock market once the worst of the pandemic had passed.
He told CNBC on Tuesday that he’s still bullish. But he tempered his enthusiasm. “What does the slope look like? It depends on how we reopen the economy.”
Sternlicht — who founded Starwood Hotels, which is now part of Marriott — said that property executives are working on “best practices” for reopening the nation’s hotels and retail stores at the behest of the White House.
“Last night, there was a call among several real estate executives that have been asked by the Trump administration to help with the opening of the economy,” he said. “What we decided we wanted to do as a group was to come up with the best practices of reopening sectors of the real estate industry.”
Those practices would include protocols for deep cleaning and possibly temperature checks at entrances to hotels or stores, he added. In the absence of government protection for businesses against coronavirus lawsuits, he said that having guests or customers sign waivers may also be considered.
“We really don’t have to wait for the government. We should actually come up with our best practices sector by sector because we know the nuances of our asset classes,” said Sternlicht, who founded Starwood Capital in 1991 and built it into a global investment powerhouse.