Good morning, and happy 4th of July weekend. It's Sunday, July 5, and in this week's edition, we're covering Starwood closing its new fund at $10.2 billion and deploying a third of it before the ink dried, why a soft June jobs report still leaves rate hikes on the table, and what six months of running AI inside my own deal files taught me about who's actually getting replaced.
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Starwood Capital closed its latest opportunistic fund, SOF XIII, at $10.2 billion. More than 300 investors across roughly 20 countries backed the raise, with Starwood and related parties putting in $100 million of their own. The fund targets residential, data center, industrial, and hospitality assets across the US and Europe - reports suggest up to 30 percent could go to data centers. Starwood has already committed over $3 billion of equity across 20 transactions, and firm-wide AUM now sits around $130 billion.
The read: when one of the biggest opportunistic buyers raises $10 billion and deploys a third of it before final close, that's a bet the pricing window is now, not later.
"How Grant Cardone Knows a Real Estate Deal Will Make Money": Grant Cardone sits down with Taylor Avakian and argues most investors underwrite backwards - asking "is this a good deal" instead of "who is my exit." He walks through why Cardone Capital structures deals around the eventual buyer, why he dropped the preferred return, and how he raised $2 billion from 20,000 retail investors while institutions stayed skeptical. Watch here
"How to Make (and Lose) a Few Billion Dollars": Niko Ludwig traces T. Boone Pickens from $2,500 and a borrowed Ford station wagon to America's largest independent oil company - then through the Gulf Oil raid, the collapse, and the comeback that earned him $1.1 billion in a single year. A case study in how narrative drives business outcomes, and worth the 34 minutes for any operator raising capital. Watch here
June payrolls came in soft, but the Fed's attention stays locked on inflation - with rate hikes still on the table this year. The economy added 57,000 jobs in June against expectations of 113,000, and April and May were revised down by a combined 74,000. Normally that softens the Fed. Not this time. Core PCE hit 3.4% in May, the highest since October 2023, and Fed Chair Kevin Warsh said policy stays restrictive until inflation returns to 2%.
CRE Impact: The pause is now the base case and a hike is the tail risk. Underwrite deals that work at today's debt costs, not the rate cut everyone keeps promising. If your refi math needs 100 bps of relief by year-end, it's not refi math - it's hope.
I Think We're Being Lied To About AI
Every week it's the same story. AI is coming for your job. Entry-level workers are toast.
I've been on an AI binge for the last six months, like many of you. Here's what actually happened: I don't work less. I work more. I just get many times the output.
For example, right now I'm working an industrial outdoor storage deal in Milwaukee. Six months ago, title work and survey analysis were someone else's department. I handed them to the attorney, he told me what to worry about, and I moved on. I didn't even know what to look at.
On this deal, I have a few due diligence agents on Claude Cowork running inside the deal file - title research, title objections, survey objections. The AI raised more concerns on the survey than a standard review would catch. Not because my attorney isn't good. He's excellent. Because AI is a second set of eyes that never gets tired, never skips a page, and doesn't have 40 other files competing for its attention at 11pm on a Thursday. Things any human misses, it catches.
And here's what didn't change: I make the decisions. The AI flags it. I decide if it matters and whether we ask the seller to fix it.
Same with leases. A medium-sized deal with multiple tenants used to mean 20+ hours of reading, summarizing, and constructing asks. Now it takes 1-2 hours. And my attorney? He's not spending $3,000 of billable hours reading leases anymore. He takes on more files, charges the same rates, handles more volume. He got upgraded. AI didn't eliminate the professional - it removed the cap on what he can produce.
I had a feeling the doom narrative didn't match what I was seeing on the ground. And here's what I found, if you haven't seen it yet - two studies rebuking the media hysteria with real numbers. Researchers just published two years of hiring data across 21,559 US firms. Firms that went heavy on AI grew headcount 10.2%. And here's the shocker: entry-level hiring - the category everyone says is most at risk - went up 12%. And one of the largest jobs datasets ever assembled - over a billion postings - found jobs requiring AI skills are growing 8 times faster than the overall market. Here's the twist: entry-level jobs that pair AI with judgment and leadership grew 35% since 2019, while routine entry-level jobs shrank 10%. The jobs aren't disappearing. They're changing shape - and paying more.
More AI. More jobs. More output. The work didn't disappear when I got faster. It multiplied.
AI isn't replacing. It's upgrading.
Bottom line: mass layoffs are not happening. My hunch - they will not happen. We may end up employing more people, not fewer. This is how I see it.
And ask yourself: isn't media hysteria almost always 180 degrees wrong? The mass layoffs just aren't happening. Look at the 10-12 people closest to you. Are they being replaced - or are they just becoming more capable?
What's AI actually doing on your team - replacing people, or raising their game?Hit reply.
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Until next Sunday.
Be well,
Saul
P.S. Missed my podcast with Danny Newberry? Here is the full episode.
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