Billionaire Barry Sternlicht Is Betting Big on MFA Stock


  • MFA Financial (MFA) stock is up more than 5% on hopes for commercial real estate.
  • Starwood Capital co-founder and CEO Barry Sternlicht continues to own about 10% of the real estate investment trust (REIT).
  • When big investors can see across the chasm, it’s a bullish signal.
Real estate investment trust (REIT) on a black notebook on an office desk.
Source: Shutterstock

MFA Financial (NYSE:MFA) stock is climbing more than 5% as of this writing. This movement in shares of the small New York investment company comes on the support of Starwood Capital CEO Barry Sternlicht.

MFA is structured as a real estate investment trust (REIT). This means its profits are distributed back to shareholders. With a quarterly dividend of 35 cents per share, MFA recently yielded over 15%.

Here’s what investors should know about MFA Financial shares this morning.

MFA Stock: Looking for a Bottom

MFA is mainly invested in real estate and mortgage servicing rights. It had loans of about $8 billion at the end of last year and a market capitalization slightly under $1 billion. Sternlicht has reportedly invested about $97 million into MFA.

Investors are looking for signs of confidence in banking and real estate, both of which have been hit hard by the Federal Reserve raising interest rates to fight inflation. Sternlicht has compared the Fed’s actions to using a steamroller to kill a fly, predicting that the economy will soon hit a wall.

But his investment indicates a lack of panic, a belief that there are opportunities and that the damage will be limited. Once the Fed stops raising rates, Sternlicht has indicated he will be lending aggressively on commercial real estate.

Economists are increasingly concerned about the $20 trillion commercial real estate industry. Analysts call it “the next shoe to drop.” 

Office and retail occupancy rates have been falling and banks are having to restrict lending as deposits flow out. Short sellers are also increasing their bets against commercial real estate companies. Boston Properties (NYSE:BXP), the largest office space REIT, is down 24% so far in 2023 and yields nearly 8%. Kimco Realty (NYSE:KIM), the largest owner of shopping centers, is down roughly 15% and yields more than 5%.

What Happens Next?

Once smart investors can look across a market chasm and see opportunity, panic usually subsides. If Sternlicht is right, better days may be ahead.

On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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