Barry Sternlicht, CEO of Starwood Capital Group, is pushing for the adoption of blockchain technology in real estate investment, but says U.S. Regulations are currently preventing his firm from moving forward with tokenizing assets. Sternlicht, whose company manages over $125 billion in assets, believes tokenization represents the future of capital raising and market access, offering a more efficient and accessible system for investors. However, he expressed frustration that current regulatory constraints are stifling innovation in the U.S., while other firms globally are progressing with similar initiatives.
The concept of tokenization involves converting ownership rights of physical assets – like real estate – into digital tokens on a blockchain. This process could unlock new avenues for investment, particularly in traditionally illiquid markets and streamline complex transactions. Sternlicht likened the current stage of tokenization to the early days of artificial intelligence, emphasizing its transformative potential. He stated at the World Liberty Forum in Palm Beach on Wednesday, “It’s ridiculous that our clients can’t do it in token,” referring to the inability to transact real-world assets using blockchain-based tokens.
The potential impact of real estate tokenization is significant. A recent report by Deloitte projects that $4 trillion worth of real estate could be tokenized by 2035, a substantial increase from the less than $0.3 trillion estimated in 2024. This growth would represent a compound annual growth rate (CAGR) of 27% for tokenized real estate. Deloitte’s analysis suggests that tokenization could address inefficiencies in the real estate industry, reduce administrative costs for investors, and broaden market participation.
Regulatory Roadblocks and Industry Momentum
Sternlicht’s comments highlight the challenges facing the widespread adoption of blockchain technology in the U.S. Financial sector. While the technology itself is ready for implementation, the lack of clear regulatory frameworks is creating uncertainty and hindering progress. Despite these hurdles, other companies are actively exploring tokenization solutions. Propy, for example, announced plans last year for a $100 million expansion to acquire mid-sized title companies in the U.S., aiming to optimize processes within the industry.
Starwood Capital’s Position and the Future of Tokenization
Starwood Capital Group, founded by Sternlicht, is a private equity firm specializing in real estate investments. As of September 6, 2024, the firm had $115 billion in gross assets under management. Forbes Sternlicht believes the technology is “superior” and represents “the future,” and is eager to implement it within his firm. He emphasized that tokenization is even earlier in its development cycle in the physical world compared to the advancements already seen in artificial intelligence.
The World Liberty Forum, where Sternlicht made his remarks, convened global leaders in Palm Beach on February 13, 2026. Business Wire Other attendees included Brad Gerstner of Altimeter Capital and Jacob Helberg of the Department of State.
What to Watch Next
The future of real estate tokenization hinges on regulatory clarity and adaptation. As the technology matures and its benefits develop into more apparent, pressure will likely mount on policymakers to establish frameworks that foster innovation while protecting investors. The progress of companies like Propy, and the continued advocacy of industry leaders like Barry Sternlicht, will be key indicators of whether the U.S. Can capitalize on the potential of blockchain technology in the real estate market.
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