it’s not going to come from government spending; government being 3 and 7 [ph]. You imagine Apple was spending a $1.7 trillion. I mean, $1.7 billion is a lot spending. That’s just the fiscal budget before you get to the stimulus programs that are still coursing through the economy. So I think it’s — like I said, I think it’s a mine field. And that’s one of the reasons, we’re not deploying all this $1 billion today because we have to be careful of every single loan and every single borrower each borrower was in a different position when I was saying about Starwood Blackstone and Brookfield, I think big borrowers and small borrowers are being judicious as fiduciaries for their capital in this climate. And it’s not like we’ve seen a deal like the deal in D.C. that we took back the — it was a household name borrower 1 of the top 5 players in this space and we got a loan back.
So people are willing to — you just think, oh, well, we’ll never walk. Well, I don’t think that’s the case right now. I think the it’s case by case, asset by asset and you have to be — you’re just being — it’s a jigsaw puzzle. So I don’t think that this is past, this is not passed. These are just a function of every borrower waiting till the last minute to try to figure out how to fix this capital stack. And if you just run the map, not — it’s nothing to do with us and it’s to do with the whole market. You’re on a coupon that was 2.5 or 3, now it’s 9. You can’t borrow the same amount of money if you want any debt service coverage test. So lenders like us, I mean, some people are just chopping their coupons, you pay us 6 and a crew 3 or something.
We haven’t done a lot of that but other people are. And just to bridge people to a brighter sky down the road. I also think you’re seeing the government has now told the banks to work with their borrowers. Don’t know what that means. But back in — you’ll probably see some AB [ph] notes, you’ll see mortgages chopped in half to induce the equity to put in money into retenant of building. I’m really focused here on the office markets. It’s not really applicable to the other major asset classes. But in the office markets, that’s what you’re going to see happen that you’ll create a hope now, just like you did last time, I think the banks — the good news this time, the banks can do it. They don’t — in ’07, ’08 they were so weak and it stem [ph] capital ratios, they couldn’t take the losses.
Now they have either set up reserves or they’re making enough money and because interest rates are so high and the yield curve is so favorable to them that they can take these losses and restructure — I’m not saying they’re happy about it. But they are a much better position to work with borrowers than they were in ’07, ’08. That should mean it should resolve more smoothly but it’s going to — it will take time. And we are definitely not out of the woods. And just because you don’t hear the BOM doesn’t mean the BOM didn’t go off.
Operator: We take the last question from the line of Sarah Barcomb of BTIG.
Sarah Barcomb: So the single-family resi market has held up pretty well. Could you speak a little more to how that resi credit book is performing and how you view the optionality to move that book. Maybe you could touch on that in the context of the SFR portfolio sale at SREIT, are you seeing any newly emerging bad debt issues that are concerning and is there any way for Starwood to recycle that into new commercial real estate opportunities? And if so, what sectors or geographies do you find most compelling right now?
Barry Sternlicht: I’ll do my part and then Jeff to his part. We’re not — the REIT is not in the single-family rental lending business. That’s not one of our verticals. We have non-QM loans and we have agency assets but we don’t have loans against SFR. The SREIT sale to invitation homes was not something we really wanted to do. We love the asset class. We love the prospects for the asset class but we had redemptions to make and that book was the lowest-yielding thing in our portfolio. So it makes sense to sell the thing that’s at least contributing to the dividend of the company. And it was a sub-5% cap rate on our numbers. And I’m fairly sure invitation can do better given their scale. And so they’re probably looking at a better number than that.
But given the debt markets and where that was and how it was financed, it was something — I think it was a a win-win. Unfortunately, we did book a small loss on selling it but that had nothing to do with our views actually at SFR. One of the markets that Starwood getting out of SFR, not at all. We own 16,000 homes away from that in our equity funds or something like that. And we really like our position. We like, again, the scarcity of new product is exacerbating the deficit of housing and housing is probably the least impacted by anything going on in the world. People have to live somewhere. They cannot live in their computer. The AI, maybe you’ll find your home differently. You’ll still have a home. I don’t think you can live in the metaverse, even though some people seem to — so until we look and live on Mars, in the moon, we’re probably okay in the housing market given the U.S. alone among most of the Western nations is actually growing, although it’s going.
