Some nationwide real estate investors, like Cardone Capital’s Grant Cardone, has started telling his team to pack their bags and leave New York after the verdict in former President Trump’s fraud trial.
“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” Wednesday. “And when that ruling happened, it was like, pencils down. Don’t touch it. Don’t go there.”
The business leader gained recent recognition after he posted on X that his firm would “immediately discontinue” all underwriting on New York City real estate to focus on other markets like Texas and Florida.
Cardone further claimed that New York has risks “that outweigh the opportunities” in terms of property value – and the blue state has shown its politicization when it comes to doing business.
“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 explained.
Additional financial concerns exist in New York for pension funds, lenders and public real estate investment trusts following civil implications from the $355 million Trump ruling, Cardone noted, potentially causing a decline in property value and an increase in loan defaults that could roll over to regional banks.
“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 expanded, “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.”
O’Leary Ventures chief and “Shark Tank’s” “Mr. Wonderful” Kevin O’Leary echoed similar concerns as Cardone on “Cavuto: Coast to Coast,” warning against developing in New York in the Trump trial aftermath.
“New York was already a loser state, like California is a loser state. There are many loser states because of policy, high taxes on competitive regulation,’ he said. ‘I would never invest in New York now. And I’m not the only person saying that.”
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Cardone cautioned of a business ripple effect, and that “nobody” in real estate will put “big money” in New York anytime soon.
“We were going to put $1 billion in New York City this year. We were going to put $1 billion in Chicago and maybe another billion in Los Angeles. And we won’t touch any of them now,” he said. “Texas, Florida, Arizona: go hard, go big and go long.”
Fox News’ Charles Creitz contributed to this report.