Billionaire Barry Sternlicht's firm just defaulted on a $200 million office mortgage amid mounting commercial-property stress

• Barry Sternlicht's company just defaulted on a $200 million mortgage backed by an Atlanta office tower.
• The mortgage matured on July 9, but Starwood Capital was unable to refinance or clear the debt.

Billionaire investor Barry Sternlicht is living through a pre warned nightmare.

His company, Starwood Capital Group, just defaulted on a $212.5 million loan tied to an Atlanta office tower that was due for payment on July 9, according to Bloomberg.

"Borrower confirmed they are unable to payoff the loan at maturity," a Computershare filing said, adding that lenders are in negotiation talks.

Starwood Capital did not immediately respond to Insider's request for comment.

Sternlicht's struggles reflect the turmoil in the commercial real-estate industry thanks to high interest rates, tighter lending standards, and work-from-home trends. Specifically, higher borrowing costs coupled with stricter access to credit - following the banking turmoil earlier this year - have made it harder for many landlords to refinance their debt, subsequently forcing them to default.

Investors have become increasingly concerned the commercial property sector could slide into crisis, with household names including Elon Musk already predicting the sector is in "meltdown."

Meanwhile, McKinsey Global Institute recently warned that global office buildings could experience an $800 billion value wipeout as remote work trends persist.

Sternlicht himself, has been vocal about rising interest rates and the effect the trend will have on the US economy. He's previously blasted the Federal Reserve for aggressively hiking rates, saying it's not sustainable and is "clearly suicide," per CNBC.

In March, the real-estate investor also warned of a "hard landing" for the US economy due to tighter monetary policy, adding that the Fed "is using a steamroller to get the price of milk down two cents, to kill a small fly."