Major Investors Pull Out Of New York After Trump Legal Ruling

Source: Twitter/wman132

Famous investors have decided to pack their bags and stop doing business in New York following the $355 million court ruling in former President Donald Trump’s civil fraud case.

Grant Cardone, a real estate big shot, announced on Tuesday that his company won’t invest in New York real estate anymore. This came one day after Shark Tank star, Kevin O’Leary also vowed to not invest in the state because of the court decision.

What Was The Ruling?

A court verdict in February against former President Donald Trump found him guilty of fraud. The court proceeded to slap him with a $454 million penalty. Originally, the verdict was $355 million, but the amount that Trump needs to repay in the civil fraud case has skyrocketed with interest.

Source: Twitter/News Bro

Trump reportedly accrues nearly $112,000 with each passing day in interest if he does not pay the judgment.

Investors Flee New York Real Estate

“Immediately discontinue ALL underwriting on New York City real estate,” Cardone ordered his firm in a post on X. “The risks outweigh the opportunities at this time. Recent political decisions will continue to deteriorate prices and benefit states that don’t have these challenges. Focus on Texas and Florida.”

Source: Twitter/Mary Frost

The ‘Sell or be sold’ author explained the reason and thinking behind his decision on Wednesday in an interview with Fox and Friends.

Don’t touch it! Don’t Go There!

“When that Trump ruling happened, it was like, ‘Pencils down,'” Cardone said. “‘Don’t touch it. Don’t go there.'”

Source: Twitter/GRomePow

Judge Arthur Engoron ruled on Friday that Trump must pay over $355 million for plotting to adjust his net worth so he can get tax and insurance benefits. Engoron’s verdict also bars Trump and his sons, Eric and Donald Jr., from doing business in New York for three years.

Worries Over Cash Flow And NYC Real Estate Trends

Cardone mentioned that they invest for 14,000 investors at Cardone Capital who rely on cash flow. He expressed concerns that if he couldn’t forecast the cash flow due to certain rulings or other factors such as migration patterns or difficulties in evictions, it would affect their investments.

Source: Twitter/GrantMitt3

He also noted that New York City seems to be making every effort to promote real estate sales in Florida rather than in New York.

A Loser State

O’Leary called New York “a loser state” He also said, “I would never invest in New York now, and I’m not the only person saying that.”

Source: Twitter/DesireeAmerica4

“This award, I mean, just leaving the whole Trump thing out of it and seeing what occurred here … and I’m no different than any other investor, I’m shocked at this,” O’Leary said. “I can’t even understand or fathom the decision at all. There’s no rationale for it.”

Winner States Vs. Loser States

In an interview, O’Leary claimed this move is just the latest in a series of bad moves that have pushed big businesses and venture firms to choose to invest in other states.

Source: Twitter/thehill

“So, they’ve got lots of work to do to find themselves getting out of this situation. This has all occurred post-pandemic … winner states versus loser states,” he said.

Nothing To Worry About

Gov. Kathy Hochul (D-NY) attempted to quell the fears flagged by Empire State investors in a Sunday radio interview, She reassured business owners that they had nothing to worry about after the Trump verdict.

Source: Twitter/GovKathyHochul

Hochul said that law-abiding New Yorkers who follow the rules and run businesses don’t need to worry because they’re very different from Donald Trump and his actions. She added that Trump’s fraud case was a result of “really an extraordinary, unusual circumstance.”

Falling On Deaf Ears

O’Leary responded to Hochul’s comments, saying every investor is worried. O’Leary questioned, “Where is the victim? Who lost the money?” He expressed disbelief at the judge’s decision, describing it as arbitrary.

Source: Twitter/eugene_mecke

O’Leary raised concerns about the legal standards in New York, wondering if there would be scrutiny of the judge’s ruling. He commented, “I’m sorry her words fall on deaf ears to everybody.” O’Leary insisted that there was no justification for the decision.

Ripple Effect Expected

Cardone warned of a ripple effect in the business world. He added that no one in real estate will be interested in investing “big money” in New York in the near future.

Source: Twitter/GrantCardone

“We were going to put $1 billion in New York City this year. We were going to put $1 billion in Chicago and maybe another billion in Los Angeles. And we won’t touch any of them now,” he said. “Texas, Florida, Arizona: Go hard, go big and go long.”

Wall Street Exodus: NY Losing Ground

A recent trend has emerged with major businesses and investors pulling out of the Empire State for better prospects. In 2023, the New York Post reported that since 2019 nearly 160 Wall Street firms have taken their headquarters out of New York.

Source: Twitter/GrantCardone

These moves have cost the state nearly $1 trillion. Up to 56 of these firms have moved to Florida and warmer states like Texas, North Carolina, and South Carolina.

Mass Migration A Big Issue

In addition to the reasons O’Leary brought up in an interview,  mass migration is another major problem for businesses. A recent rise in border crossings in the United States has seen more migrants being conveyed to New York City. This has led to many challenges in providing for them.

Source: Twitter/qwerty14117587

CNBC recently reported that the immigration crisis could lead to bankruptcy in large cities like New York City and Chicago.

Wall Street Crucial

A New York State Comptroller report in 2022 revealed that the business on Wall Street is responsible for almost 16% of New York City’s total economic activity. Wall Street firms also comprise about 7.3% of economic activity across the entire state as well.

Source: Twitter/RockyBTrades

If these businesses leave, this will create further strain on the government as their tax revenue dries up at a time when migrant workers and immigration travelers are straining the system.

Reforms Are Needed

With the recent trend of businesses leaving New York, major investors and real estate developers like O’Leary are raising the alarm. Changes are inevitable if this course is not reversed.

Source: Twitter/PatrickLovell1

Investors need to be able to trust government officials and the court system so that their investments won’t crumble right in front of them like Trump’s did. People should heed O’leary’s warning, as it could signal potential trouble for the developed Empire state

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Mary Scrantin

Written by Mary Scrantin

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