Starwood Real Estate Income Trust, the second-largest nontraded REIT in the country, has swapped CEOs amid a turbulent time for the real estate market and an upswing in investors looking to pull their funds.

John McCarthy, who served as SREIT’s CEO since its launch in 2017, was replaced by Sean Harris, who had been its president since 2021, according to a Securities and Exchange Commission filing first reported by CoStar.

McCarthy has shifted to the role of vice chairman of the board for the Miami Beach-based REIT. The filing didn't give a reason for the change.

The leadership switch comes as SREIT faces rising pressure from investors looking to withdraw their money, and it has limited its redemptions every month since November.

In November, SREIT's redemption requests reached 3.2% of the REIT’s net asset value, and it limits monthly withdrawals to 2% of NAV. Redemption requests in January surpassed 5% of NAV.

The structure of nontraded REITs allows them to limit liquidity for investors, but a freeze in the the fourth quarter from SREIT, along with industry-leading Blackstone REIT, spooked investors and caught the attention of the SEC.

Starwood posted a negative return of 1.86% in the first quarter, after posting double-digit positive returns over the prior three years. In an April filing, it attributed the negative return to the declining values of its interest rate caps and swaps and expressed confidence in its real estate holdings.

SREIT's portfolio was valued at $13B as of March 31, it said in the filing. Roughly 83% of its portfolio is in the residential and industrial sectors, and 75% of its assets are located in the Southeast and Southwest.

The nontraded REIT sector, which Starwood and Blackstone have dominated, came about in 2016 but quickly grew in importance after raising huge sums of money. Last year, the sector raised $33B in total.

SREIT is managed by Starwood Capital and chaired by Starwood CEO Barry Sternlicht. It is the second nontraded REIT in as many months to replace its CEO after Brookfield REIT's Zach Vaughan stepped down in early April.