Following the verdict in former President Trump’s fraud trial, some nationwide real estate investors, such as Grant Cardone of Cardone Capital, have instructed their teams to prepare to leave New York.
“We thought this year was the opportunity to come into Chicago, California, and New York City. I’ve been waiting for 40 years now to invest in that marketplace. I was completely confident this was the year to come,” Cardone told Steve Doocy on “FOX & Friends” on Wednesday. “And when that ruling happened, it was like pencils down. Don’t touch it. Don’t go there.”
New York Judge Arthur Engoron, who had already determined last fall that Trump committed fraud by overstating his assets when seeking favorable business loans despite the fact that none of the banks he did business with were harmed or lost money, fined the former president $355 million in a case brought by Attorney General Letitia James, the latter of whom campaigned on ‘getting Trump.’
Cardone received recognition after he posted on X that his firm would “immediately discontinue” all underwriting on New York City real estate and will instead focus on other markets like Texas and Florida, which have much friendlier business climates and are run by Republicans.
Cardone further claimed that New York has risks “that outweigh the opportunities” in terms of property value and that the left-wing Democrats who run the state appear to be focused more on politics.
Dear Cardone Capital team,
Immediately discontinue ALL underwriting on New York City real estate. The risk outweigh the opportunities at this time.
Recent political decisions will continue to deteriorate price and benefit states that don’t have these challenges.
Focus on Texas… pic.twitter.com/nTdJ5d4dO5
— Grant Cardone (@GrantCardone) February 20, 2024
“We invest for 14,000 investors at Cardone Capital that depend on cash flow. And if I can’t predict the cash flow because of some ruling, or because of the migrants, or because I can’t evict people, New York City just keeps doing every single thing they can to sell real estate in Florida, not sell real estate in New York,” the fund manager noted.
Cardone pointed out that there are further financial worries in New York for pension funds, lenders, and public real estate investment trusts due to the civil repercussions stemming from the $355 million Trump ruling. The situation could potentially lead to a decrease in property value and a rise in loan defaults, which may subsequently affect regional banks, he said.
“Loan proceeds are based on the value of the property. They’re going to require me to actually underwrite my property on the cash flow, the income of the property and what valuation I believe that property’s worth. The broker also put a valuation on it,” the investor further explained, “and then the bank is also going to use at least one other appraisal, maybe two, or independent of me.”
“There could be as many as five appraisals on that. The value that I’m going to put on the property. Keep in mind, when I’m buying something, I’m not thinking about selling it the next day. In the case of Trump, he’s not selling any of this stuff,” Cardone continued. “We want the property for the cash flow… every seller is always going to push the price value up based on the future, not based on fraud.”
