Prominent investors are making significant shifts in their business strategies following a notable legal ruling involving former President Donald Trump in New York. Grant Cardone, a real estate mogul, declared on Tuesday that his firm, Cardone Capital, would cease underwriting New York real estate. This decision came shortly after Kevin O’Leary, known from Shark Tank, expressed his decision to halt investments in the state due to the verdict.
The ruling, delivered by Judge Arthur Engoron, requires Trump to pay over $355 million for manipulating his net worth to gain tax and insurance advantages. Additionally, Trump and his sons are barred from conducting business in New York for three years.
Speaking on the Cats Roundtable radio show hosted by billionaire John Catsimatidis, Hochul aims to allay fears that the penalties imposed on Trump could negatively impact businesses in New York. She emphasizes that law-abiding businesspeople need not worry, as the circumstances surrounding Trump’s case are exceptional and do not reflect the typical behavior of New York entrepreneurs. Hochul acknowledges concerns raised by some business leaders regarding potential repercussions on the state’s business environment but highlights the unique nature of the case, where Trump and his allies allegedly manipulated real estate values to secure favorable loans and insurance rates.
During an interview with CNN, O’Leary remarked, “I believe this case transcends Trump entirely.” He stressed its wider ramifications for investors, expressing disapproval of what he perceived as selective prosecution in New York. O’Leary suggested that such actions unfairly target individuals like Trump for behaviors considered inappropriate, prompting investors to wonder, “Who will be targeted next?” He characterized the situation as a “victimless crime,” arguing that it did not cause any financial harm.
Coates raised concerns about the legal acknowledgment of crimes such as falsification of business records and insurance fraud, questioning whether these should have been prosecuted.
In response, O’Leary highlighted the unprecedented nature of the case, emphasizing that similar practices had gone unprosecuted for 75 years. He pointed out that activities like falsifying records were common among real estate developers worldwide and had never faced legal action before.
Expressing his apprehension about investing in New York again, O’Leary underscored his belief that the city’s actions were alienating investors and diminishing its appeal as a business hub.
Coates further delved into the broader ethical implications of business practices, challenging the normalization of fraudulent behavior within the industry.
O’Leary defended the industry’s reliance on banks for due diligence and emphasized the traditional negotiation processes between developers and financial institutions. His argument aimed to highlight the industry’s established norms rather than solely defending Trump.
He questioned the basis for the fraud allegations, emphasizing that the issue transcended Trump and underscored broader concerns about legal and ethical standards in the business world. “Excuse me. What fraud? This is not about Trump anymore.”
In a post on X, formerly Twitter, Grant Cardone said, “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 & Florida.
Grant Cardone, CEO of Cardone Capital, made a decisive announcement via a post on X platform. He directed his team to cease all investment activities in New York City real estate immediately. Cardone cited concerns over recent political decisions, which he believes will lead to a decline in property prices.
In his message, Cardone emphasized the need to prioritize investor interests, stating that the risks currently outweigh the potential benefits of investing in New York City real estate. He expressed apprehension about the unpredictability of cash flow due to various factors such as legal rulings, migration patterns, and restrictions on evictions. Cardone highlighted the competitive advantage of states like Florida over New York, attributing it to what he perceives as New York’s unfavorable business environment.
Both investors emphasized that the issue transcends partisan politics and is more about the business environment in New York. They underscored the need for clarity and fairness in legal proceedings to maintain investor confidence in the state.
If you don’t cheat on your taxes you have nothing to fear. Real estate in NYC will always attract investment. I find it unbelievable that any large group of investors would be so frightened by a corruption trial judgement that they would lift their skirts and run away from a megapolis like NYC.