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Feb 18
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AVOID
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Steven Fulip
Partnership for New York City President and CEO
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NYC Mayor is threatening a property tax hike if a wealth tax isn't passed. Fulip notes this would push NYC corporate taxes to ~22% compared to 11% in neighboring New Jersey. The tax disparity creates a "trip wire" for businesses. Fulip highlights that JPMorgan (JPM) now has more employees in Texas than in NYC, signaling a structural shift of business operations away from the city due to fiscal policy. Avoid NYC-centric real estate and commercial exposure as the tax burden threatens to drive further corporate exodus. The Governor (Hochul) may block the tax proposals, maintaining the status quo. |
CNBC
Squawk Pod: Baby Formula, A Tax Hike, & The L...
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Feb 18
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SHORT
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Joe Mathieu
Host, Bloomberg Radio
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NYC Mayor is proposing a significant increase in property taxes on "high income earners and businesses" to close a budget gap. Increasing carrying costs for commercial and high-end residential real estate in a city already struggling with occupancy (commercial) and migration (residential) will further depress asset values and net operating income (NOI) for landlords. SHORT. Fiscal desperation leads to policy errors that hurt asset prices. Proposal fails to pass in state legislature; federal bailout/assistance. |
Bloomberg Markets
Partial Shutdown Drags on Over DHS Funding | ...
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Feb 17
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WATCH
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Willy Walker
CEO, Walker & Dunlop
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"We're seeing some of the AI companies start to take serious space out in San Francisco and there's a very significant bid on San Francisco office today where 18 months ago there was no bid." The "Office is Dead" narrative is fracturing. AI clusters are creating localized demand shocks in previously abandoned markets like SF, suggesting a bottom may be in for specific high-quality assets. Watch for distressed entry points in office REITs with West Coast exposure. Delinquencies are still at 12.3%; broader office market remains broken outside of AI hubs. |
CNBC
Property Play: Scenes from a CRE finance conf...
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Feb 15
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AVOID
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Paul Krugman
Nobel Prize-winning Economist, Distinguished Professor, Publisher of the Paul Krugman Substack
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Krugman highlights that US net migration may have turned negative. He cites the "accelerator principle," stating that investment demand depends on the *growth* of the population. "If the working age population is shrinking then you don't need a lot more office buildings." A stagnating or shrinking workforce destroys the fundamental demand for new physical space (offices/housing). Without population growth, the vacancy rates in commercial real estate cannot be absorbed. AVOID Commercial Real Estate and Office REITs. A sudden reversal in immigration policy or a productivity boom that increases space requirements per worker. |
Monetary Matters
“A Huge Problem for Everybody” | Paul Krugman...
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Feb 10
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LONG
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Scott Rechler
Chairman & CEO, RXR (Real Estate Developer / Fed Board Director)
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"New York's best quarter for office leasing in years... The facts are saying people and companies believe in New York... investing in New York, and aren't afraid." The market has priced NYC Office REITs (like SL Green or Vornado) for a "doom loop" scenario. Rechler provides proprietary data suggesting the bottom is in (leasing up, luxury sales up 30%). If the "death of NYC" narrative is wrong, these assets are severely undervalued. Contrarian Long on NYC-specific real estate exposure. Crime/Quality of life issues (mentioned regarding homeless encampments) could reverse the trend if not managed by the Mayor. |
CNBC
Squawk Pod: Kalshi CEO on Super Bowl wins & N...
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