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- 11/06/17--06:45: _Wealthy millennials...
- 11/06/17--09:43: _A 58-story skyscrap...
- 11/07/17--05:34: _There are so few ho...
- 11/07/17--11:24: _The most expensive ...
- 11/08/17--10:01: _These are the 15 mo...
- 11/09/17--08:22: _The richest 1% of N...
- 11/09/17--10:14: _An Under Armour co-...
- 11/09/17--12:41: _I'm a financial pla...
- 11/13/17--05:01: _What a $500,000 hom...
- 11/13/17--11:00: _No one wants to buy...
- 11/15/17--10:47: _A 20-year-old YouTu...
- 11/15/17--14:12: _Sam Zell explains h...
- 11/16/17--09:25: _Condo prices at Tru...
- 11/16/17--10:56: _Here's how much mon...
- 11/17/17--06:52: _Real estate M&A has...
- 11/17/17--11:28: _Oracle billionaire ...
- 11/20/17--11:36: _A hedge fund manage...
- 11/20/17--17:59: _Foreign buyers are ...
- 11/20/17--20:19: _Barbara Corcoran's ...
- Historically, young people have shied away from investing in the stock market, and millennials are no different.
- Wealthy millennials own more expensive homes than the average 20-something, but real estate makes up a smaller percentage of their net worth.
- Some wealthy millennials own second homes, while the average 20-something struggles to pay off student loans.
- There are 12% fewer homes for sale today than there were a year ago.
- Buyers typically search for months and sometimes make multiple offers on different homes before one gets accepted.
- Zillow's CEO, Spencer Rascoff, shared four tips for winning a bidding war, from choosing a reputable agent to writing the seller a letter.
- 11/08/17--10:01: These are the 15 most expensive homes for sale in New York City
- The most expensive available listings in New York City range from $50 million to $85 million
- Many feature scenic views of Manhattan and vast amounts of indoor and outdoor space.
- Some of the most luxurious amenities include yachts, chef services, wine cellars, and steam rooms.
- Under Armour cofounder Kip Fulks is selling one of his homes for $13.5 million.
- Located in St. Mary's, Pennsylvania, the property contains over 7,150 acres and has amenities for hunting, fishing, and skiing.
- The property can house up to 38 guests.
- Real estate can be profitable if you're patient.
- Unlike investments in the stock market, real estate investments aren't liquid or diverse.
- Always understand the risks before making a big bet in real estate.
- 11/13/17--05:01: What a $500,000 home looks like in 15 major cities across America
- The price per square foot for homes can vary drastically from city to city.
- You can get a lot more space in Dallas or Chicago than in Boston or San Francisco.
- To compare home size across housing markets, real estate listing site Trulia pulled listings in the $500,000 range for the 15 biggest US metros.
- A Martha's Vineyard estate is now for sale for $17.75 million.
- It's been on the market for years and has seen several price cuts.
- It was used by the Obama family as a summer getaway in 2013.
- Social media star Jake Paul has reportedly bought a new mansion in Calabasas, CA.
- It covers 15,000 square feet over 3.5 acres, and he paid $6.9 million for it.
- Paul had previously stirred up controversy by annoying his neighbors.
- 11/15/17--14:12: Sam Zell explains how to make money in today's real estate market
- Sam Zell is founder and chairman of Equity Group Investments.
- He was recently interviewed by Goldman Sach's Top of Mind newsletter about his views on the market today.
- Condo prices are plummeting at Trump Tower.
- A report said average prices are down to their lowest rates since the financial crisis.
- Donald Trump's presidency could be partially to blame for the dropoff.
- Rents in New York City are increasing at double the rate of incomes.
- In many neighborhoods, the median monthly rent is much higher than the median income in its borough.
- Manhattan is home to the city's most expensive neighborhoods.
- It's been a record year for real estate mergers and acquisitions, with $387 billion in announced transactions worldwide.
- Part of the explanation rests with Real Estate Investment Trusts (REITs) that own and operate shopping malls, which have been battered amid the ongoing retail apocalypse but now may be undervalued.
- Global logistics businesses, which need warehouses to house and distribute product, are also driving the trend.
- In July, Nesta Investment Holdings, a Chinese investment firm, bought Singapore-based Global Logistic Properties, Asia's biggest warehouse operator, for $16.4 billion.
- Blackstone sold European logistics and warehouse giant Logicor to China Investment Corp for $13.8 billion in June.
- Larry Ellison, Oracle's founder and former CEO, has an extensive real estate portfolio.
- His holdings include multiple homes in Malibu and Lake Tahoe, as well as mansions in San Francisco and Silicon Valley.
- He also owns 98% of the Hawaiian island of Lanai.
- Hedge-fund manager Barry Rosenstein put his Hamptons beach house on the market for $70 million.
- The property covers 13,623 square feet and has seven bedrooms, 9.5 bathrooms, a guest cottage, and a lap pool.
- Rosenstein broke the record for the most expensive home ever sold in the United States when he paid $137 million for another Hamptons property in 2014.
- Foreign buyers aren't the cause of skyrocketing real estate valuation, rather they are a symptom of the real cause: speculation.
- Barbara Corcoran is a real-estate mogul and a "Shark Tank" star.
- Corcoran's ex-boyfriend and ex-business partner left her for her secretary in the 1970s.
- The ex told her she'd never succeed without him.
- That helped motivate Corcoran to launch her own real-estate company and become wildly successful.
There's been much talk about millennials being fearful of the stock market. They did, after all, live through the financial crisis, and many are shouldering record levels of student loan debt, while grappling with rising fixed costs.
The truth is that historically, young people have always shied away from investing. A whopping 89% of 25- to 35 year-old heads of household surveyed by the Federal Reserve in 2016 said their families were not invested in stocks. That's only two percentage points higher than the average response since the Fed began the survey in 1989.
MagnifyMoney analyzed data from the 2016 Survey of Consumer Finances, conducted by the the Federal Reserve, to determine exactly how older millennials — those aged 25 to 35 — are allocating their assets.
In 2016, wealthy millennial households, on average, owned assets totaling more than $1.5 million. That is nearly nine times the assets of the average family in the same age group — $176,400. Included were financial assets (cash, retirement accounts, stocks, bonds, checking and savings deposits), as well as nonfinancial ones (real estate, businesses and cars).
While the wealth of each group was spread across just about every type of asset, the biggest difference was in the proportions for each category.
To add an extra layer of insight, we compared the savings habits of the average millennial household to millennial households in the top 25% of net worth. We also took a look at how the average young adult manages his or her assets to see how they differ in their approach.
Millennials invest 60% of their money in the stock market
Despite significant differences in income, we found that both sets of older millennial households today (average earners and the top 25% of earners) are investing roughly the same share of their financial assets in the market – about 60%.
Among the top 25% of millennial households, those with brokerage accounts hold more than 37% of their liquid assets, or about $224,000, in stocks and bonds and an additional 26%, or $154,000, in retirement accounts. Meanwhile, just over 14% of their assets are in liquid savings or checking accounts.
By comparison, the average millennial household with a brokerage account invests a little over $10,000 in stocks and bonds, or 22% of their total assets, and they reserve about 21% of their assets in checking or savings accounts.
Millennial households invest most heavily in their retirement accounts, accounting for around 38% of their financial assets, although they have only saved $18,800 on average.
Wealthy millennials carry much less of their wealth in checking and savings, compared with their peers. Although wealthier families carry eight times more in savings and checking than the average family — $84,000 vs. $10,300 — that's just roughly 14% of their total assets in cash, while for the ordinary young family that figure is around 20%
The Fed data show that those on the top of the earnings pyramid are able to save far more for the future, even though they're at a relatively early stage of their careers.
Across the board, older millennial families hold the greatest share of their financial assets in their retirement accounts. Although that share of retirement savings is smaller for wealthier millennial families (26% of their financial assets, versus 38% for the average older millennial family), they have saved far more.
When looking at the median amount of retirement savings versus the average, a more disturbing picture emerges, showing just how little the average older millennial family is saving for eventual retirement.
The median amount of money in higher earners' retirement account is $90,000 (median being the middle point of a number set, with half the available figures above it and half below). But the median amount is $0 for the typical millennial family, meaning that at least half of millennial-run households don't have any retirement savings at all.
Wealthy millennials have less of their net worth tied up in the value of their home
Most of millennial households' wealth comes from physical assets, such as houses, cars and businesses.
While nearly 60% of young families don't own houses today, the lowest homeownership rate since 1989, homes make up the largest share of the family's nonfinancial assets, Fed data show.
For the average-earning older millennial family, housing represents more than two-thirds of the value of its nonfinancial assets — 66.4%. On average, this group's homes are valued at $84,000.
The homes of rich millennial households are worth 4.6 times more, averaging $470,000 — though they represents a lower share of total nonfinancial assets — 50%.
Cars are the second-largest hard asset for the average young family to own, accounting for about 14% of nonfinancial assets.
While rich millennials drive fancier cars than their peers — prices are 2.4 times that of average millennials' cars — their $42,000 car accounts for just 4.5% of their nonfinancial asset. In contrast, they stash as much as 31% of their asset in businesses, 20 percentage points higher than the ordinary millennial.
It's worth noting that young adults in general are not into businesses. A scant 6.3% of young families have businesses, the lowest percentage since 1989, according to the Fed data. (Among those that do have them, the businesses represent just over 11% of their total nonfinancial assets.)
Wealthy millennials have way less student debt
Possibly the starkest example of how wealthy older millennials and their ordinary peers manage their finances can be seen in the realm of student loan debt.
A significant chunk of the average worker's household debt comes in the form of student loans, making up close to 20% of total debt and averaging $16,000. In contrast, the wealthiest cohort carries about $2,000 less in student loan debt, on average, and this constitutes just about 4.6% of total debt.
With less student debt to worry about, it's no surprise wealthier millennial families carry a larger share of mortgage debt. About 76% of their debt comes from their primary home, to the tune of $233,500, on average. This is 4.5 times the housing debt of a typical young homeowner.
In some cases, the top wealthy have another 11% or so of their total debt committed to a second house, something not many of their less-wealthy peers would have to worry about — affording even a first home is more of a struggle.
When is the right time to start investing?
For many millennials the answer isn't whether or not it's wise to save for retirement or invest for wealth but when to start. Generally, paying off high interest debts and building up a sufficient emergency fund should come first. Once those boxes are ticked, how much young workers invest depends on their tolerance for risk and their future financial goals.
"It's never too much as long as you've got money for the emergency fund, and as long as they are funding their other goals not through debt," says Krista Cavalieri, owner and senior advisor at Evolve Capital in Columbus, Ohio.
The biggest mistake that Cavalieri has seen among her young clients is that very few have been able to establish an emergency fund that will cover at least three to six months' worth of living expenses.
Kelly Metzler, senior financial advisor at the New York-based Altfest Personal Wealth Management, said older millennials may not be able to save outside of retirement accounts yet, which can be a concern if they want to buy a house or have other large purchases or unexpected expenses ahead.
Cavalieri said that's because young adults' money is stretched thin by the varies needs in their lives and the lifestyle they keep.
"Their hands are kind of tied at where they are right now," she said. "Everyone could clearly save more, but millennials are dealing with large amounts of debt. A lot of them are also dealing with the fact that the lack of financial education put that in that personal debt situation."
The lawsuits are piling up at the "leaning tower" of San Francisco.
Millennium Tower is a luxury residential high-rise that has sunk 17 inches and tilted 14 inches since it was completed in 2008. Though an inspection by the city showed it's safe to occupy, the situation has sparked an exodus from the building. Residents say they're selling multimillion-dollar condos at a loss, with the value of their homes tumbling $320,000 on average.
There are at least 20 parties involved in lawsuits related to Millennium Tower, according to a "60 Minutes" segment that aired on Sunday. One disgruntled resident told producers that with so many lawyers involved, it takes the court 30 minutes just to take attendance during legal proceedings.
Here's what we know about Millennium Tower.
Millennium Tower rises 58 stories above San Francisco's Financial District.
The city's fourth-tallest skyscraper contains over 400 multimillion-dollar condo units. It soars 645 feet, giving residents with panoramic views of the Bay Area.
Completed in 2008, Millennium Tower includes top-notch amenities, such as a pool, fitness center, wine cellar and tasting room, movie theater, and concierge service.
Source: Millennium Tower
See the rest of the story at Business Insider
It's a seller's market.
On an episode of Business Insider's podcast, "Success! How I Did It," Zillow's CEO, Spencer Rascoff, told Business Insider US editor-in-chief Alyson Shontell that buyers generally search for about four months before they find a place and sometimes make multiple offers on a dozen homes before one gets accepted. (A 2016 Zillow report indicates that about one-quarter of buyers make three or more offers.)
Listen to the full episode here, or listen later with the buttons below:
Rascoff also shared his best advice for standing out in a sea of prospective buyers:
1. Choose a stellar agent
"He or she can advocate for you and provide you advice," Rascoff said. "You should read reviews of real estate agents on Zillow or any website. I don't really care where you read reviews, don't just rely on a referral from a friend."
2. Be patient and persistent
"Be prepared to make multiple offers," Rascoff said.
3. Write a letter to the seller
"It can't hurt," Rascoff said. "But appealing to their emotions can be successful. I've had success a couple of times with that."
See the rest of the story at Business Insider
Real estate site PropertyShark recently pinpointed where it's most expensive to live in the city now.
To compile the Q3 ranking, the company found median prices for residential properties sales closed between July 2017 and September 2017 (including single-family homes, condos, and co-ops).
To keep up with the city's rising population, Mayor Bill de Blasio implemented an affordable housing plan in 2014 that aims to preserve or create 200,000 units of housing with regulated rents by 2024. As of July 2017, 77,651 affordable units— with rents no higher than $3,461, depending on the household income — have been financed by the city.
Below are the 10 most expensive New York City neighborhoods, along with their median home sales prices, as of this fall:
10. Dumbo, Brooklyn — $1.58 million
9. NoMad, Manhattan — $1.69 million
8. Red Hook, Brooklyn — $1.92 million
See the rest of the story at Business Insider
New York City is no stranger to expensive homes and apartments, many of which have astronomical price-to-square-footage ratios.
While celebrities and billionaires continue to snatch up the city's most luxurious residences, sometimes as financial investments rather than living spaces, there are still plenty of options available for anyone with $50 million to spare.
These are the 15 most expensive listings currently available in New York City, according to Streeteasy.
15. 854 Fifth Avenue — $50 million
With nine floors and plenty of views of Central Park, this townhouse was designed by the architects behind Grand Central Station, who were inspired by the Palace of Versailles.
14. 219 East 44th Street — $53 million
Featuring six units on the top seven floors of a 35-story building, this "mansion in the sky" penthouse has floor-to-ceiling windows that provide scenic views of Manhattan.
13. 4 East 66th Street — $55 million
Combining architectural styles from the 1920s with modern flourishes, this apartment features a private elevator and views of Central Park.
See the rest of the story at Business Insider
When an apartment or penthouse isn't big enough for wealthy New Yorkers, they get creative.
In recent years, several have combined multiple townhouses or building floors to create supersized homes — or Frankenmansions, as New York magazine's S. Jhoanna Robledo calls them.
To construct these Frankenmansions, some prospective buyers purchase multiple buildings at once, while others approach their neighbors to offer multimillion-dollar buyouts. (In either scenario, they need the city's approval before combining properties.)
Check out these 12 Manhattan Frankenmansions owned by big names — including Madonna and Sarah Jessica Parker — outlined below in red.
Former New York City Mayor Michael Bloomberg's Frankenmansion is nearly complete.
Bloomberg has bought five of the six apartment units in the building next to his 7,500-square-foot townhouse over the last three decades. After connecting four units in 2009, he grew his home to 12,500 square feet, according to the New York Post. The buildings are steps from Central Park.
A 25-bedroom pair of townhouses sold for $18 million.
The Missionary Sisters of the Immaculate Heart of Mary, an NYC-based convent of nuns, acquired the townhome on the right in 1948. Four years later, the group bought the one next door and connected the space via a doorway on each floor.
Throughout the years, the order has rented some of the complex's 25 bedrooms to other congregations or young women in need. The 15,600-square-foot space went on the market for $19.75 million in June 2016, according to the New York Times. And according to Streeteasy, it sold to an unknown buyer two months later for $18.8 million.
Sarah Jessica Parker lives in a pair of twin townhouses worth $34.5 million.
The star of "Sex and the City" snatched the two brick townhouses above from the nonprofit United Methodist Women, then fused them. The organization listed the pair of buildings (which were not connected) for $44 million in 2016, but Parker paid $34.5 million, according to The Real Deal.
The 13,900-square-foot mansion includes nine bedrooms, eight bathrooms, a 2,100-square-foot private garden, and five floors.
See the rest of the story at Business Insider
Under Armour has struggled to keep up with its athletic apparel competitors, failing to gain traction with athletes and consumers. But one of the company's co-founders, Kip Fulks, may stand to gain over $13 million if his home sells close to what he's asking for it.
Located in St. Mary's, Pennsylvania, the property known as North Fork Lodge is on the market for $13.5 million, the Wall Street Journal reported.
Sprawling over 7,150 acres and able to hold dozens of guests, North Fork Lodge allows residents an escape from the bustle of city life. Take a look at the property below.
Fulks and his wife, Beth, bought the property for around $7.8 million in 2007. Fulks has long been fond of it, claiming "it was love at first sight," when the property came to his attention.
Source: Wall Street Journal
The property sits next to a lake and also contains a brook trout and bass pond for fishing.
Source: Hall and Hall
There are also plenty of trails and hunting grounds.
See the rest of the story at Business Insider
There's always been some kind of starry-eyed dream around the idea of making a big payoff in real estate investing. I'd say about half my clients have floated a real estate idea in one form or another to me over the years.
I think it's because of the "cocktail party" effect (or "BBQ effect," if you aren't the cocktail party type, which I'm not). The stories are juicy. They are hard to ignore: "Yeah, my buddy Jim made $500,000 on an apartment complex in Austin. He's asking me if I want in on his next deal." I have a number of friends still living Austin from my engineering days at Dell, and the quote above is based on a real conversation.
I mean, it makes sense, right? You invest a bit, hold onto the property for some random length of time, then walk away with even more money when property values rise. I think it's also appealing because it's a physical asset. Most investors are familiar with homes, apartments, etc., and you can go see it if you want.
But before you get sucked into the latest real estate investment scheme, take a deep breath and open your eyes to these cold hard facts about real estate investing.
1. Real estate is not like the stock market
Unfortunately, the concept of timing your buys when the market is low and selling when the market is high, and getting caught up in the market hype does not always translate to the real estate arena.
Real estate can be profitable with patience. Homes grow in value over time, not overnight. You pay so many fees when selling property that even if you are making a bit of profit from built-up equity, you are paying out thousands when you sell. Depending on the turnaround time and the number of times you do this, you could be throwing away tens of thousands to fees that you could have invested better.
2. Real estate is a leveraged investment
Plain and simple, a leveraged investment is using borrowed money to invest and crossing your fingers for an even bigger return. Here's the thing: when leverage works, you multiply your winnings. But when it doesn't, it's doubly bad: You magnify your losses. Remember when home values dropped to crazy lows in 2008? It wasn't that long ago. Some borrowers ended upside-down: their mortgage balances were above what their homes were worth.
Leverage isn't inherently good or bad, but it's risky. Are you comfortable taking on extra risk with your hard-earned dollars?
3. It limits your diversification ability
First, take a look at your assets. How much do you have set aside for retirement? What about for extra investing, education plans, contingency funds? How much additional cash are you bringing in each month that you can put towards saving?
Now answer this: How much are you willing to cut out of higher-priority investing to dump into a real estate deal? People who tend to invest in seductive real estate propositions put a disproportionate amount of their wealth in real estate. All the excitement can easily cause a concentrated, leveraged bet in real estate.
Every individual should be investing according to the asset allocation that is right for them based on their goals, risk tolerance, and time horizon. If you own your own home and have 5% of your portfolio dedicated to real estate investment trusts (REITs) via mutual funds, you have plenty of real estate exposure. Don't make real estate an inadvertent concentrated bet.
4. Lack of liquidity
Liquidity is a big word to describe how quickly you can get your hands on your cash. Unfortunately, real estate is considered the least liquid of assets because of how long it can take to sell. If you are investing too much of your wealth in real estate, you might end up banging your head against a wall if you ever need quick access to funds.
5. The real estate market is high
Unlike a mere five years ago when the housing market was slowly recovering from the 2008 crash, house values are currently quite high. That's great news for you if you purchased a home anywhere between 2008-2012, but not great if you want to get into real estate investing right this second. If there is growth in the coming years, it probably won't be as drastic as it has been.
False comfort won't get you far
The stock market can be confusing. It's this weird entity, seemingly controlled by unknown factors, and that freaks a lot of people out. Real estate, on the other hand, can be seen and touched. It makes sense. You can see what factors add up to increase the value of a home, and to that end, you feel a sense of control. But false comfort does not equal true peace of mind. Don't be lured into so-called once-in-a-lifetime real estate schemes without understanding the risks. Rise above the hype, educate yourself and build wealth smarter.
Greg Brown is a fee-only financial planner and the founder of Pathway Financial Planning.
Space is hard to come by in some of America's most popular housing markets.
Homebuyers in Boston and San Francisco, for instance, are paying over $1,000 per square foot right now, while buyers in Detroit and Chicago are paying closer to $200 per square foot.
To find out how home sizes compare across America, we asked Trulia to gather listings in the $500,000 range for the largest metro areas.
Below, check out how much square footage buyers get for homes priced between $489,000 and $525,000 in 15 popular cities.
New York City
Listing price: $499,000
Square feet: 550
Price per square foot: $907
Listing price: $489,000
Square feet: 871
Price per square foot: $561
Listing price: $519,000
Square feet: 2,600
Price per square foot: $200
See the rest of the story at Business Insider
This isn't just any ordinary picturesque Martha's Vineyard estate — it has a presidential pedigree.
President Obama and his family rented this sprawling, 7,000-square-foot mansion for an entire summer in 2013, according to The Wall Street Journal. But that seems not to have made the house any easier to sell.
Now it'll be just a little bit cheaper to live like the First Family all year round. The house listed in July 2015 for $22.5 million. Just three months later, the house already had a 15% price chop.
Now, nearly two years later, the house is still for sale, at a discounted price of $17.75 million.
Sotheby's International Real Estate has the listing.
Brittany Fowler contributed reporting to an earlier version of this article.
The Wall Street Journal notes that the rural town's seclusion was what drew the Obamas to the property.
Sitting on over nine acres of land at 120 feet above the Atlantic, the home affords bountiful ocean views of the South Shore and Chilmark Pond.
A private driveway leads to the estate, which includes a half basketball court, a dock, and access to three private beaches.
See the rest of the story at Business Insider
20-year-old social media star Jake Paul has a habit of annoying his neighbors, so anyone who lives near his new, $6.9 million mansion in Calabasas should be on high alert.
Before Paul reportedly bought it, the home had been listed for $7.395 million, according to the Los Angeles Times.
Paul, who became famous by making short videos on the now-defunct social media platform Vine, has built a following of over 11 million subscribers on YouTube. He also acts on the Disney Channel show "Bizaardvark" and started a management company for social media personalities.
After he claimed that his neighbors tried to kill him in July, it makes sense that Paul would be looking for a new home.
Here's what his new, 15,000-square-foot mansion looks like.
The mansion sits on a total of 3.5 acres of land.
Source: Open Listings
Built in 1990, the house features incredibly high ceilings and large rooms.
The entrance leads to a spiral staircase that rises three stories.
See the rest of the story at Business Insider
Sam Zell is one of the market’s most successful and influential real estate investors. Zell is the Chairman of Equity Group Investments, the private investment firm he founded in 1969 and also chairs five public listed companies including Equity Residential, the most substantial apartment REIT in the US.
The latest issue of Goldman Sachs’ Top of Mind research newsletter features an interview with Zell. Within the interview, he discusses the current state of the equity markets, where he’s finding value today, and his views on the US real estate market.
Sam Zell on value hunting in today's market
Zell's interview starts by discussing his outlook for the economy. He can't offer much of a guided view but does believe that the election of Donald Trump has dramatically increased business optimism, which has given more life to the bullish business environment.
And despite all the noise surrounding the Trump administration, Zell believes that the president has made significant headway on deregulation. Proposed changes to Dodd-Frank are just one of the factors helping improve optimism in the business community.
Even if tax reform hits a wall, Zell is still positive on the outlook for US growth:
"I think tax legislation will be passed and will definitely feature a reduction in the corporate tax rate, likely some adjustments on the taxation of repatriated income, and maybe some reduction in taxes for middle-to-low-income people. Beyond that, I don't have much expectation for significant tax reform. And if it fails to pass, I think the opposition will be blamed, not Trump."
However, despite his views about the US economy, Zell believes that some assets are showing signs of stress. Specifically, Zell points to "opportunities when day-to-day activities don't make any sense to me:"
"I tend to see those opportunities when day-to-day activities don't make any sense to me. And there is probably nothing more relevant to seeing around the corner than assessing supply versus demand. For example, when I see people building office space without being able to identify the future tenants, as I do today, that is a warning sign that supply is engulfing demand."
As well as commercial real estate, Zell is skeptical about the valuation of Tech firms. He says that in order to justify the multiple that Amazon trades at today, "the company would have to be worth 25% of the US economy five years from now." The company could grow to this size, but it's highly likely US policymakers will step in to restrict the business's influence if it becomes such a major part of the US economy.
"I'm also generally concerned about the size, scale, and influence of these companies, which I think is out of hand and dangerous to our overall society. Absolute power corrupts absolutely, and these companies are being set up to do exactly that."
Big tech has undoubtedly dominated the minds of investors all over the world this year. With these companies growing at the rate they are, it makes sense to want a piece of the pie. But while fund managers and private investors rush to get in on the action, Zell is finding pockets of value in the corners of the market, corners other investors have overlooked.
"The most crowded areas are in technology, applications, “disruptions,” and all of the magic words that are driving people today. But the excitement over them doesn’t make them compelling. In many cases, I don't think you're getting paid for the risk involved—and the risk, by the way, may be unbridled competition.
By contrast, I see opportunities in much more mundane areas. For example, we made a big investment this year in a trash-hauling business. We're building waste-to-energy facilities. We've been buying refineries. We're looking at agricultural investments. These are all assets that people value inappropriately, in my view. And, while perhaps less flashy than tech, that's the kind of stuff that I'm always looking for."
Put simply, even though some regions of the market look undervalued, Sam Zell believes that there are still bargains out there, and he's putting his money where his mouth it.
Zell isn't the only fund manager still finding value. In the latest issue of ValueWalk's exclusive magazine Hidden Value Stocks, we profiled two value hedge fund managers who each discussed two separate value stock picks.
SEE ALSO: How 37 big banks combined into just 4
The prices of condos at New York City's Trump Tower have plummeted since President Donald Trump launched his campaign in 2015.
The dropoff is so severe that real estate in the Fifth Avenue building has reached its lowest value since the Great Recession, The Wall Street Journal reported last week.
The average price per square foot in the property is $2,100, down 13% from 2016 and 23% from the year before, according to The Journal.
Analysts are pointing to multiple factors that could explain the cheaper prices, including heightened security since Trump was elected, a general dislike of Trump, or an overall deceleration in the luxury condo market in the area.
However, Trump Tower's condos are dropping more rapidly than other properties in Midtown Manhattan. Excluding new developments, the average price per square foot in the area has seen a slight uptick of 0.3% since 2015.
"There is no way of knowing whether prices have taken a nose dive because of the restrictions that are now associated with living in the building — such as the Secret Service and police presence — or because the Trump brand so closely aligned with the building is having a depressing effect on prices," Gabby Warshawer, director of research at the real-estate website CityRealty, told The Journal.
Boaz Mashiach, whose real estate group lists two Trump Tower properties for $7.8 million, said Trump's presidency could be a factor in the building's declining condo prices, but added that the market was "very soft right now."
"Some people don’t like to live in his building — and there are some people who want to live only in his building," he told The Journal.
Trump Tower, standing 664 feet tall, occupies prime real estate near Manhattan's Central Park. It was the headquarters for Trump's presidential campaign and was the site of several protests and demonstrations following Trump's election.
The skyscraper isn't the only one of Trump's properties in an apparent slump. The nearby Trump International Hotel and Tower has seen a 24% drop in its average price-per-square-foot rate since 2015, down to $3,600, according to The Journal.
On Thursday, the Independent reported that the Trump Organization is worth just one tenth of the value it previously claimed.
As New York City rents become more expensive, many residents are facing the possibility of being priced out of their apartments or having to dedicate large portions of their incomes to housing. In fact, in the past seven years, rents have increased at double the rate of incomes, according to StreetEasy, which means that you need to make six figures to afford living in many of the city's most desirable neighborhoods.
To illustrate the disparity between wages and housing expenses, StreetEasy calculated the median rent in most of the neighborhoods in New York City and determined the amount of money you would have to make each year to ensure that rent does not consume more than 30% of your income, which is the real estate company's definition of affordability.
The website then compared the recommended incomes to the actual median incomes of those living in each borough and found that in many cases, New York City residents were spending a significant portion of their incomes on rent. You can find the full results here.
These are the four most expensive neighborhoods in Queens, Brooklyn, and Manhattan — and the amount of money you'd need to make to afford living there.
Long Island City, Queens
Median Asking Rent: $2,570
Recommended Income: $102,800
% Compared to Borough Median Income: 65.3%
Little Neck, Queens
Median Asking Rent: $2,575
Recommended Income: $103,000
% Compared to Borough Median Income: 65.6%
Median Asking Rent: $2,695
Recommended Income: $107,800
% Compared to Borough Median Income: 73.3%
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Mergers and acquisitions of real estate companies have hit record levels in 2017.
Through November 15, more than 3,300 real estate deals were announced worth $387 billion. They account for 12.1% of the total global M&A market by value, according to data compiled by Thomson Reuters.
Each figure is a year-to-date record, eclipsing marks set in 2007 on the eve of the financial crisis when there were 2,500 deals worth $380 billion making up 11.9% of the M&A market through mid-November.
But unlike 2007, the asset class doesn't appear to be part of a bubble on the verge of its reckoning.
To the contrary, many Real Estate Investment Trusts (REITs) — stricken by ties to the unfolding retail apocalypse that has caused thousands of store and shopping mall closings — have been battered and underperformed the broader market, which has notched record high after record high this year.
The fact that real estate companies with retail exposure are trading at discounts is one component driving the M&A boom, according to several Wall Street dealmakers, as acquirers search for REIT targets at which investor backlash may be overblown.
"These companies are trading at significant discounts to [Net Asset Value]," Drew Goldman, Deutsche Bank's global head of real estate, gaming, leisure, and lodging investment banking, told Business Insider. "And people are saying, 'Should that actually be the case?'"
Take, for instance, the megadeal announced this week that pushed real-estate M&A into record territory: Brookfield Property Partners' $27.9 billion bid for shopping-mall investor GGP, the third-largest real-estate deal of all time, according to Thomson Reuters data.
Brookfield's $23-a-share bid was a more than 20% premium to GGP's share price before news of the deal leaked. But it's still significantly lower than what many think the company is worth.
Brookfield, which already owned 34% of GGP before its bid to acquire the rest, said the shares it held were worth about $30 based on net asset value in a conference call in October.
So by Brookfield's own estimation, GGP is worth far more than what they've offered for it.
And GGP isn't the only one. Activists are circling two of GGP's peers that also run high-end malls, angling to unlock value: Paul Singer's Elliott Management has bought a stake in Taubman Centers, a $3.4 billion company, and Dan Loeb's Third Point acquired a position in Macerich Co, a $9.2 billion company.
Both were trading near their 52-week lows before the activist positions were revealed in the past week.
Absent the upheaval in retail and the REITs exposed to it, M&A in the sector likely wouldn't be so hot.
"If you take out those, you're probably in a more normalized year," Deutsche Bank's Goldman said.
It's not just REITs, though
Amazon may also have contributed to the heightened demand for real estate, as its foray from e-commerce to physical stores, including the purchase of Whole Foods in June, has underscored the enduring necessity of bricks and mortar — even for internet companies.
"If you look at the Amazon and Whole Foods acquisition, it's being perceived by many as a validation of the need to marry bricks and sticks with tech platforms," said Stephen Tomlinson, a partner and top real estate M&A lawyer at Kirkland & Ellis.
Industrial real estate transactions have also thrived in 2017, contributing to record deal levels.
"As a whole, industrial — if you look at the public companies, if you look at the private markets — the industrial space has been very hot," said Goldman, mentioning that there were "two massive deals" sold to Chinese investors.
Consolidation has increased globally as industrials seek the capacity necessary to house and distribute products at a global scale.
"That is to a large degree a function of the impact of technology and its connection to logistics businesses," Tomlinson said. "That is a business where scale and global footprint are perceived to be important."
Oracle founder Larry Ellison is no stranger to the real estate market — he's been called"the nation's most avid trophy-home buyer" and has all but taken over entire neighborhoods in Malibu and the Lake Tahoe area.
When asked by CNBC in 2012 why he would buy more homes than he could possibly live in, Ellison referenced his love of art.
"I'm going to start these art museums that are basically converted homes, and I have one for modern art, and I have one for 19th-century European art, and one for French impressionism,"Ellison said to CNBC. "I've got Japanese. I own a home in Kyoto, Japan actually on the temple grounds in Nanzenji that is going to become a Japanese art museum. So, a lot of them are museums."
Though his 2012 purchase of the Hawaiian island of Lanai has been his largest overall investment by far, he's made a number of blockbuster purchases over the last two decades.
In 1988, Ellison paid $3.9 million for a William Wurster home in San Francisco's swanky Pacific Heights neighborhood, a popular area that's now home to other tech moguls like Mark Pincus, Jony Ive, and Trevor Traina. Several news outlets reported Ellison planned to buy the home next door for $40 million, but the sale never happened.
Source: Curbed SF
His home in Woodside, California, modeled after a 16th-century Japanese emperor's palace, is worth an estimated $70 million. The 23-acre estate took nine years to design and build, and it was completed in 2004.
Source: SF Gate
He also owns a historic garden villa in Kyoto, Japan, which was reportedly listed for $86 million, though the price he actually paid is unknown.
Pictured: Nanzen-ji Temple, which is right near Ellison's estate
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Three years after buying the most expensive home in US history, hedge-fund manager Barry Rosenstein is putting another of his homes on the market for $70 million. Located in the Hamptons, the home was purchased by Rosenstein for $19.2 million in 2005, according to the Wall Street Journal.
Rosenstein founded the hedge fund Jana Partners in 2001. The fund has invested in Whole Foods and Blue Apron, among other companies. In 2013, he paid $137 million for a home in East Hampton — a purchase that remains a record in the United States.
While it won't break any real estate records, Rosenstein's $70 million property is still quite luxurious. Take a look at what it has to offer.
The home covers 13,623 square feet.
Source: Douglas Elliman Real Estate
If the home sells for its listed price, Rosenstein stands to make a profit of more than $50 million. He bought it for $19.2 million in 2005.
It has a total of seven bedrooms and 9.5 bathrooms.
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Foreign buying numbers for Toronto and Vancouver real estate are going to spike soon. The registry will likely be hammered with higher numbers, and climb at a rapid rate. This will look like the non-resident speculator tax, and China’s capital controlsare starting to fail, but that’s likely not the case. Most of these units about to hit the registry were bought months, and possibly years ago. Canadians are about to be bluffed because not even government officials understand the flaw with their method of data collection. Here’s the problem, and why the numbers are going to soar. Even though an increase in foreign buying is very unlikely here.
When I think of a foreign buyer, I think non-productive speculator. Someone that sits in another country and buys property through an agent. Someone who will likely never see the property. Basically, urban land bankers. These buyers add additional pressure to housing stock, and pocket the profits on flips overseas, paying very few local taxes. Unfortunately, that’s not how the numbers are tallied. They also include immigrants, and people with work visas as well.
Most Canadians don’t have an issue with immigrants, and people on work visas in Canada. After all, they pay taxes and contribute to the local economy. The government gives these people a break. For example, Ontario offers a rebate to people becoming permanent residents, or have attended school for more than two years. Even though these people get a rebate, they’re still counted in the foreign buying numbers, due to how the numbers are collected. Let’s quickly discuss how that process works.
How foreign buyer numbers are born
When a person falls in love… with their money. Kidding. Foreign buying numbers are created when a non-resident registers a property transfer. When a non-resident hands over their property transfer tax forms, they also have to file a form for a non-resident speculator tax. Yes, even if they’re eligible for a rebate. This pumps the foreign buyer numbers higher than the actual tax that will be collected. Speculator numbers are reported higher as a result.
There’s also one more issue that may come from this method, one that makes it seem like numbers are going to climb just a year after a non-resident tax was passed in Vancouver. This issue is a result of how pre-sale condo construction works.
Foreign buyers and condo pre-construction
It’s probably one of the worst kept secrets that Toronto and Vancouver condo pre-sales are heavily marketed overseas. Many scalp the assignments, selling them back to locals for 10s of thousands in profits. Yet these numbers are never included in foreign buying numbers because they never register land, the buyer of the assignment does. Some units are held through registration however, and these are the ones that count towards our foreign buying numbers.
Over the past two years, the median length of time construction has taken is over sixteen months in Vancouver. This means quite a few foreign buyers that will be hitting the registry, bought well over a year and a half ago – at least. Knowing this, and the current number of units currently under construction, it’s going to appear that foreign buying is skyrocketing. Especially when contrasted with a significant decline in sales volume in resales.
Remember, people want you to think that foreign buying is the primary driver of prices. Foreign buyers do contribute to price increases, but they’re a small part of the bigger issue – speculation. Locals are under the impression that home prices only go up, providing massive liquidity for any speculator that has more capital. This disproportionate focus tends to blind buyers, to the point where they don’t want to understand numbers, and they become highly susceptible to manipulation. This will be very likely the reality in the coming weeks, as the numbers get misread by media.
"You know," Barbara Corcoran's ex-business partner and ex-boyfriend told her soon after they split up, "you'll never succeed without me."
Anyone else might have felt those words sting and then, eventually, brushed them off. But for Corcoran, "It just hit me in the gut and I felt that fever in my body like, 'I'll be damned if you ever see me not succeed.' I felt like I would kill not to let that thing happen."
Four decades later, Corcoran is a real-estate mogul and a star investor on the ABC series "Shark Tank." That is to say, she's more than proved that ex-boyfriend and ex-business partner wrong.
On an episode of Business Insider's podcast, "Success! How I Did It," Corcoran told US editor-in-chief Alyson Shontell how her relationship with that ex-boyfriend, Ramone Simone, changed her life.
Corcoran was a waitress at a diner when she met Simone. Early in their relationship, Simone suggested she go into real estate. Corcoran worked as a receptionist at a real-estate agency; Simone suggested they start a real-estate company together.
He gave her $1,000 and said she could take 49% of their business, which was called Corcoran-Simone company.
Seven years later, Corcoran told Shontell, Simone came home and announced — surprise! — he was going to marry Corcoran's secretary.
After the breakup, Corcoran took a level-headed approach to dissolving the Corcoran-Simone company. She told Shontell: "I put the rules down. I said, 'This is how we're going to end the business. You picked the first person [her secretary]. I'll take the second.' We divide our receivables, we divide our cash — the little we had."
Corcoran was savvy about starting the Corcoran Group
When Corcoran was starting her real estate company, she placed her very first business advertisement in The New York Times. She asked her old boss at the real-estate agency if she could have one of his listings to advertise. It was the apartment next to the super's, and it had an L-shaped living room with a small bedroom, "like every other apartment in New York."
Corcoran wanted to make her ad stand out. And so she asked if she could put up a fake wall in the living room and wrote: "1 BR Plus Den: 340."
She told Shontell, "It fit on one line, right margin, and I probably got 80 phone calls that next morning. … Within the first two days I had a check for $340."
Corcoran sold The Corcoran Group years later for about $70 million in 2001.
Perhaps the sweetest revenge she exacted on Simone right after the breakup? She told Shontell:
"I moved two floors above him in the same building. I went immediately to my landlord to ask for a new lease on another space and it was a tough market. He happily gave it to me and it was cheaper than my other lease by a few hundred dollars a month. And I loved getting out of that elevator with Ramone Simone and his new wife every day and saying, 'Sorry, I'm going up.'
"Stupid ego lifts that you do in life, right! But somehow that made a difference. If I was below him, psychologically it would not have been good."