So much for the New York City property market...

 

This news is several days old, but it only caught my eye yesterday.

Months before New York City approved a historic two-year rent freeze, Google co-founder Sergey Brin quietly exited a struggling real estate fund at a steep loss.

In December, Brin sold his stake back to A&E Real Estate, the fund's manager, for six cents on the dollar, according to documents obtained by Bloomberg.

The fund holds 5,900 rent-stabilized apartments, with Brin's stake being valued at roughly $79 million, a drop in the bucket when viewed next to his $280 billion net worth.

"A&E bought out one of our long-term investors, who was willing to accept six cents on the dollar on their original equity investment to divest itself from the New York City multifamily sector," a company representative told Bloomberg in a statement.

"The simple and deeply troubling fact for renters is that institutional capital – both equity investors and lenders – are fleeing New York City’s rent-stabilized apartment sector," the A&E representative continued, according to Bloomberg. "They understand New York is in a doom loop."

There's more at the link.

Think about that for a moment.  Working backwards from "Brin's stake being valued at roughly $79 million" at the sale price - i.e. at six cents on the dollar of his original investment - that means he originally invested about $1.3 billion in the real estate fund.  He's lost almost all of that money, thanks to New York City's cratering real estate market, undermined as it is by the socialist communist policies of newly-elected Mayor Mamdami.

If a man as economically savvy as Mr. Brin walks away from a $1.3 billion investment, writing it off as unrecoverable, what are smaller investors to think?  Can they afford to follow his example?  For that matter, can they afford not to follow his example?  Makes you think, doesn't it?

If I were unfortunate enough to live in or near New York City, or have money invested there, after hearing that news I'd be taking steps (rapid ones) to move myself and/or my money somewhere (anywhere!) else . . . before I lost all my investments, too.

Peter