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
29 comments:
Possibly it was unrecoverable. But I suspect Brin also wanted to exit before Mamdani thinks up some method to try to get hold of the rest of his wealth.
Lack of dealings of any sort in New York City will make it harder for Mamdani to put in a claim.
NYC will never be as good as it was with the demographic it had when the movie Breakfast at Tiffany's was filmed.
The 'whites' are low 30s as a percent and probably mostly libtard. Then add in the turd world mud people who voted for this stupidity.
But repeat after me, 'Duh-versity is our strength!'
FYI: The posted links do not work for me.
I second what Knuckle Busted says. The link returns "error 406 Not Acceptable."
Thats the only explanation that makes sense. Six cents on the dollar, the investment is a complete loss.
Am I the only one that thinks 'rent freezes' are unconstitutional?
Evidently.
The Fifth Amendment requires just compenstation for the taking of private proerty (rent) for public use!
In 1961, the year Breakfast at Tiffany's came out, there were 438 murders in NYC in a population of 7.8 million people.
In 2023, there were 391 murders from a population of 8.8 million.
Maybe "muh demographics" aren't the problem here.
To those having problems with the link: I don't know what's going on. When I click them (first and second link), both work. Anyone got any ideas that might help?
To dive deeper into the history of rent regulations in NYC:1943 Federal Freeze: The Office of Price Administration (OPA) froze rents and placed restrictions on evictions across the city.1950 State Takeover: When federal controls expired after the war, New York State passed its own rent control laws in 1950 to regulate units built prior to February 1, 1947.1969 Rent Stabilization: Following a continuing housing shortage in newer post-war buildings, NYC enacted the Rent Stabilization Law, which covers most buildings with six or more units constructed before 1974.
I get the 406 error on my first try but a couple page refreshes and the page opens.
@ Tom,
if you believe the 2023 stats, do I have a bridge in Brooklyn to sell you!
Re. 406 error - this is to do with proactive content negotiation; the error may be due to the server not having content available matching your browser language settings or something similar. From RFC 7231:
"6.5.6. 406 Not Acceptable
The 406 (Not Acceptable) status code indicates that the target
resource does not have a current representation that would be
acceptable to the user agent, according to the proactive negotiation
header fields received in the request ..."
The RFC also says "Proactive negotiation has serious disadvantages ..."
In any case, reloading worked for me (maybe they have several servers and only one of them has the problem, or something)
It's also not a "rent freeze" it's a "privately owned property rent freeze", at the same time he raised the rent at all the city owned projects.
Rent control is like nationalization. The next step is complete removal of private property rights, government take-over of the property, and any investment funds left are confiscated. A less polite society would be building gallows, and many officials would be long gone.
Why should I trust the stats from 2023 less than the ones from 1961?
The NYC death spiral is accelerating!
he lost almost all of his investment, but if he had not thrown it away, how much more would he be on the hook for in liability and legal fees when the city starts getting creative to seize the buildings? first there will be the new regulations requiring improvements, penalties for NOT renting apartments, then lawsuits for not meeting the new regulations, the the seizing of the buildings and the lawsuits against the prior owners to upgrade them....
He probably thinks he is lucky to get off with only losing 94% of his investment, not 200+% of his investment.
If he had sense, he'd not have gotten into that position in the first place. But failing that, he should have sold his stake the morning after Comdami won.
@Tom: NYC, and a few other large US cities, stopped reporting all of their crime statistics to the DOJ/FBI after 2022. You'll see a big dropoff in "violent crime" starting in 2023.
Sergey can afford to write off that investment...and get a tax benefit from it. The majority of investors cannot. That kind of loss often leads to bankruptcy.
Economic death spiral. They've reached the tipping point and it can't come back without draconian fixes that nobody is willing to make. They're content to eat other men's bread until it stops and they starve.
Here's the numbers from the previous years:
2012: 419
2013: 335
2014: 333
2015: 352
2016: 335
2017: 292
2018: 295
2019: 319
2020: 468
2021: 488
2022: 438
NYC is going to look like Detroit in a year or two.
The necessary overdue correction in the market? Rent control, large number of corporation owned real estate, large inorganic influx of people.
He basically did, in terms of the usual time scale for decisions like this. Mamdani was elected in November 2025, and according to the article the sale was in December 2025.
The barbarians are in the city, he's getting out while he can leave with anything!
So 1.3 Billion represents ~.5% of Mr. Brins 238 Billion Net Worth. I would be unhappy with that, but given Mr. Brin's net worth is MANY orders of magnitude greater than mine less of a sting for him. That said it shows Mr. Brin sees a strong downside to NYC real estate that it was worth chewing his leg off to get out of the trap. Mr. Mamdani will soon run out of other people's money and like Mayor Beame, will be told "Drop Dead" by the feds for the foreseeable future (and will not get a reprieve like Gerry Ford Gave NYC, and yes, I know that Gerry Ford didn't actually say drop dead). . Whether New York State will bail NYC out is unclear, The Democrat Party holds the legislatures, but the ongoing battle between the DSA and the Democrat party main body is unclear. I would say get popcorn and hang on to your hats if you have anything to do with NYC.
NYC will get no bailout from the state; they are already 50-90B in the hole and digging.
One thingI I haven't seen discussed in the media, is with all the investment money fleeing the residential housing market in NYC, who is going to pay for maintenance and upkeep? One of the tragedies of government owned housing projects in the past (think Cabrini Green in Chicago) is that with no ownership stake in the units, the residents literally destroyed their own dwellings. Couple this with the usual government (non) efficiency in getting needed repairs done, and soon you'll have people living in unsafe buildings, with no relief in sight and all that entails with crime, drugs, etc.
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