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 February 22, 2024

Real estate investors ending work in NYC over Trump ruling

Grant Cardone, a prominent figure in nationwide real estate investment through Cardone Capital, has announced a significant shift in strategy following the conclusion of former President Trump's fraud trial.

Concerns stemming from the trial's outcome have prompted Cardone and other investors to reconsider their presence in New York, a decision with far-reaching implications for the real estate market.

The comments

During an interview with Steve Doocy on "FOX & Friends," Cardone disclosed his decision to halt investments in New York City real estate.

He expressed disappointment over what he perceives as a landscape where risks overshadow opportunities, exacerbated by what he views as the politicization of business operations.

The announcement, made on the social media platform X, reverberated throughout the industry. Cardone stated that his firm would cease underwriting on New York City real estate, redirecting attention to markets deemed more favorable, such as Texas and Florida.

The NYC problem

The decision was not made lightly, as Cardone articulated the multifaceted challenges posed by investing in New York. He cited difficulties in predicting cash flow, exacerbated by civil implications arising from the Trump ruling.

This ruling, which has cast a shadow over the real estate landscape, has the potential to impact property values and trigger loan defaults, which could have ripple effects on regional banks and pension funds.

Cardone emphasized the meticulous process involved in property valuation, highlighting the critical importance of future cash flow in investment decisions.

He underscored the nuanced approach required in navigating the aftermath of the trial verdict, cautioning against knee-jerk reactions.

Not alone

Kevin O'Leary, chief of O'Leary Ventures and renowned as "Mr. Wonderful" on "Shark Tank," echoed Cardone's sentiments on "Cavuto: Coast to Coast," advising against further investment in New York post-trial. O'Leary warned of the adverse effects of policy, high taxes, and competitive regulations, characterizing New York as a "loser state" alongside California.

The ramifications extend beyond individual investors, potentially impacting the broader real estate industry. Cardone noted a reluctance among investors to commit substantial funds to New York City in the foreseeable future.

Instead, he advocated for redirecting investments into states like Texas, Florida, and Arizona, perceived as offering more conducive business environments.

The decision marks a significant shift in investment strategy for Cardone Capital and underscores the challenges faced by real estate investors navigating the post-trial landscape in New York. As the industry grapples with uncertainty, investors are recalibrating their portfolios and seeking opportunities in regions deemed more resilient to the prevailing challenges.

Written By:
Dillon Burroughs

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