Exchanged-traded funds are creating havoc in the stock market, leaving investors uncomfortable, Barry Sternlicht, chairman and CEO of Starwood Capital Group, said, CNBC reports.

"All the residential mortgage REITs got killed [recently] when people thought rates were going to rise," added Sternlicht, one of the world's largest real estate managers. "We have a commercial mortgage REIT. We sold with them only because the ETFs were selling. So it's program selling."