Cardone Capital's fund manager, Grant Cardone, has begun telling his teams to prepare to leave New York after a verdict in the fraud trial of former President Donald Trump was reached last week.
Cardone's Message
"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."
Cardone gained attention after he posted "immediately discontinue" all underwriting on New York City real estate to focus on Texas and Florida from his X account.
He further stated that the risks involved far outweigh the opportunities in terms of property value and that New York had shown its politicization when 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 concerns also exist in New York for pension funds, public real estate investment trusts, and lenders following the wide range of civil implications resulting from the $355 million ruling against Donald J. Trump.
Carbone also said this ruling could cause a decline in property value and increase loan defaults, eventually affecting regional banks.
"Loan proceeds are based on the value of the property. They're going to require me to 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."
