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Investors pulling plug in New York over Trump ruling

By Mandy Donalds
|
February 22, 2024

A $355 million civil penalty leveled against former President Donald Trump has prompted significant investors to reevaluate their commitment to New York's real estate market.

Grant Cardone, a leading figure in real estate investment, announced on Wednesday that his company, Cardone Capital, will cease all real estate underwriting activities in New York, as Newsmax reported.

This declaration came shortly after Judge Arthur Engoron's verdict on Friday in a lawsuit initiated by New York Attorney General Letitia James, which also bars Trump from engaging in any business within the state for three years.

Cardone took to X on Wednesday to express his firm's new stance, stating, "Immediately discontinue ALL underwriting on New York City real estate. The risk outweighs the opportunities at this time. Recent political decisions will continue to deteriorate price and benefit states that don't have these challenges."

He further emphasized a strategic pivot towards states like Texas and Florida, citing them as more favorable environments for investment.

Industry Shockwaves

Cardone is not alone in his response to the court's decision.

Kevin O'Leary, renowned for his role on Shark Tank, also voiced his astonishment and concern on Monday.

O'Leary shared with Fox Business his inability to grasp the rationale behind the judgment, stating, "This award, I mean, just leaving the whole Trump thing out of it and seeing what occurred here … and I'm no different than any other investor, I'm shocked at this. I can't even understand or fathom the decision at all. There's no rationale for it."

Trump himself commented on the situation via Truth Social, applauding O'Leary's stance and predicting a mass exodus of businesses from New York City and the state in light of the "Corrupt Judge's ruling."

The Implications for Real Estate

In an interview with Fox News, Cardone elaborated on the immediate impact of Judge Engoron's ruling on his investment strategy, likening it to an abrupt halt in operations.

He highlighted the challenges posed by unpredictable cash flow, exacerbated by the ruling, migration issues, and eviction restrictions.

According to Cardone, these factors collectively make New York an unattractive market for real estate investment, indirectly boosting markets in other states like Florida.

"We invest for 14,000 investors at Cardone Capital that depend on cash flow," Cardone explained.

He added, "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."

Truckers Boycott NYC

After the ruling, a group of truck drivers aligned with former President Trump also declared they won't be driving to New York City in protest of the court's decision. 

"I'm just one of the many millions of Truckers who believe in God and love this Country," a trucker known as "Chicago Ray," wrote on X. "I stand with Trump bc Trump stands with me. Truckers for Trump ain't just a slogan, it's real."

Chicago Ray made the statement on Feb. 16 following the ruling, urging fellow truckers to refrain from delivering shipments to New York City.