New York Sees Investor Exodus Post-Trump Ruling

Prominent New York investors and real estate developers are starting to speak out in response to the recent Trump ruling in New York City. Some investors in the city are viewing the legal ruling, which found Trump liable for fraud, as a threat to future business dealings in the Empire State.

A ruling in February against former President Donald Trump found him liable for fraud, with the court slapping him with a $454 million penalty, according to the BBC. Originally, the judgment was $355 million, but the amount that Trump needs to repay in the civil fraud case has ballooned with interest.

Kevin O’Leary, famous for his role on the hit show “Shark Tank”, expressed his negative sentiments on the case in an interview with Fox Business.

During the Fox Business interview, O’Leary expressed his frustration with the decision, saying that it doesn’t make much sense.

O’Leary didn’t hold back in his criticism of the decision, citing this latest event as another reason why he considers New York a “loser state.” (via Fox Business)

In the Fox Business interview, O’Leary claimed this move is just the latest in a series of bad moves that have encouraged big businesses and venture firms to look to other states for their business.

One point that O’Leary brings up in the interview was the lack of a victim in the Trump case.

O’Leary found the judge’s decision to enact such a harsh penalty a hard thing to justify and isn’t ultimately helping anyone.

Amid the evolving landscape of real estate investment, Grant Cardone, a notable figure in the sector, is making a significant move by withdrawing his investments from New York City. 

In a follow-up to his initial statements, Cardone took to social media to express his concerns about the long-term impacts of a New York judge’s decision on the city’s real estate market.

Grant Cardone’s decision to cease investment in New York marks a significant turn in his firm’s strategy. 

Cardone emphasizes the critical nature of predictability in investment, pointing to the challenges in New York as a key factor in his firm’s decision to exit. 

Cardone emphasizes the critical role of predictable cash flow for his 14,000 investors.

The Trump trial’s fallout is expected to ripple through New York’s financial ecosystem, affecting property values, loan conditions, and overall investor confidence. 

Cardone’s revelation of redirecting planned billion-dollar investments away from New York demonstrates the magnitude of the shift.

Investors like Cardone are reassessing the balance of risk and reward in various markets, with New York’s current climate tipping the scales towards higher perceived risk. 

The political and regulatory landscape is a pivotal consideration for real estate investors, with states perceived as business-unfriendly falling out of favor. 

The focus on stable, growth-oriented markets is expected to continue as investors like Cardone seek environments that support predictable and favorable returns. 

There has been a recent trend of big business and investors leaving the Empire State for better opportunities. In 2023, the New York Post reported that nearly 160 Wall Street firms have moved their headquarters out of New York since 2019. A move that cost the state nearly $1 trillion.

The attractiveness of Texas and Florida for investors like Cardone stems from their stable, growth-oriented environments, contrasting sharply with the perceived unpredictability and political entanglements in New York.

In addition to the reasons O’Leary brought up in his Fox Business interview, another source of trouble for businesses comes from mass migration. A recent surge of boarder crossings in the United States has seen additional migrants being bussed to New York City, leading to some structural challenges in providing for them.

The politicization of New York’s legal and regulatory framework is also causing unease among investors, who view the recent legal outcomes as indicative of a broader trend of unpredictability. 

According to a New York State Comptroller report in 2022, the business on Wall Street accounted for nearly 16% of New York City’s total economic activity. Wall Street firms make up around 7.3% of economic activity across the entire state as well.

Given the trend that businesses are leaving New York, prominent investors and real estate developers like O’Leary are sounding the alarm. Reforms may be necessary to reverse this course.