Starwood Capital Group said ‌on Wednesday it would temporarily suspend redemptions at its $22-billion real estate fund following a strategic review, as it waits for market conditions to improve.

Starwood said conditions were detremental to the fund's growth:

— Redemptions have driven the fund's net asset value down 6% in the last 12 ‌months, Starwood Capital CEO Barry Sternlicht said in a letter to ​the REIT's shareholders, adding that he does not expect the pressure going forward.

— The suspension is effective Wednesday and ⁠applies to share repurchase requests submitted for April, with exceptions to redeem accounts ​with balances below $5,000 and requests in the case of death or disability.

— From ⁠April, the REIT is also cutting its annualized distribution rate to 4.7% for its Class I share, down from 6.3% in March.

"We recognize this decision may be frustrating for ‌some shareholders. However, taking this step now allows us to preserve the ​opportunity to realize ‌better outcomes as market conditions improve," Sternlicht said.

The REIT will reintroduce liquidity when it can be ‌done in a "consistent and sustainable way," he said, adding that it was waiting for revenue growth to return to the sector.

"We would also expect ⁠the war with Iran to conclude, ‌oil prices to subside, inflation ⁠to stabilize, and for Kevin Warsh to be seated as Fed Chair, supporting a lower ⁠interest ⁠rate environment," Sternlicht added.

The company will actively explore capital raises pursue asset sales, it said.

Starwood Capital, ‌one of the world's largest real estate investment managers, launched SREIT in 2018. The REIT owns 598 income-producing properties valued at $22.4 billion, with 94% occupancy, as of March ‌31.

Starwood ​Capital has invested $500 million ‌in the REIT, and along with employees and affiliates, own about 7% of its equity.

The news comes as the private credit ​industry also faces redemption pressure amid geopolitical volatility, concerns over AI and increased scrutiny of private credit.