US commercial real estate investors may turn to other opportunities as vacancies remain high and interest rates rise, according to Barry Sternlicht, chief executive officer of Starwood Capital Group.

“There are a lot of tourists in property and REITs right now,” Sternlicht said at a panel discussion yesterday at the Milken Institute Global Conference in Beverly Hills, California. “Everybody is racing for yield.”

If interest rates head higher, “you will see a pause that will take a lot of capital out,” he said. Corporate bonds may benefit, according to Sternlicht.