Kevin O'Leary has sounded an alarm for real estate developers eyeing New York.
In a stark warning, Kevin O'Leary, the prominent figure behind O'Leary Ventures and a familiar face on "Shark Tank," has underscored the mounting risks in New York's real estate development sector, drawing attention to a recent punitive damages order against former President Donald Trump as a cautionary tale.
This move, he argues, puts a spotlight on the broader concerns about investing in the state's real estate landscape.
O'Leary is unnerved by what he perceives as an arbitrary decision by a New York judge, which he believes sends a chilling message to the entirety of the real estate investment community in the state. The ruling against Trump, ordering him to pay $355 million, is seen by O'Leary not just as a singular event but as a symptom of a deeper malaise affecting the New York business climate.
His remarks come at a time of increasing scrutiny over the investment appeal of various states, with O'Leary outright labeling New York as a top contender on his list of "loser states." According to him, such states are defined by their policies, high taxes, and competitive regulation, which he views as detrimental to business.
Kevin O'Leary doesn't mince words when it comes to his disappointment with New York, driven by a recent court's ruling. He describes the investment climate as an "atrocity" and an "embarrassment," expressing his disillusionment with what he terms as an "assault on real estate." These strong sentiments reflect a broader concern about the state's policy and regulatory framework direction, which, according to him, discourages investment.
O'Leary recommends alternative states for business incorporation and investment, such as North Dakota, West Virginia, Texas, and Oklahoma, which he praises as "winner states." He contrasts these with California, Massachusetts, and New Jersey, criticizing them for similar reasons in New York. His advice is underscored by observations from FOX Business host Charles Payne, who supports O'Leary's stance and adds that $1 trillion in business has transitioned away from New York, predominantly towards Florida and Texas.
According to Charles Payne:
Forget about the Trump factor. It's not about that. What does this say to everybody that wants to do work in New York and wants to risk capital? … this judge arbitrarily decided that this is the right amount. I don't understand it. No developer does. It's an atrocity. It's an embarrassment, but it's an assault on real estate.
The narrative of states losing or gaining business is intricate, tied to tax structures and policy and perceptions of regulatory fairness and operational freedom. O'Leary's critique is harsh but echoes a sentiment felt by many investors who are wary of committing resources to environments perceived as hostile or unpredictable. Payne's commentary amplifies this concern, pointing out the tangible shift of a trillion dollars in business predominantly to states with more favorable conditions.
The discourse turns towards New York's additional challenges, notably crime and regulatory increases. These factors, alongside the punitive damages ruling, paint a grim picture of New York's appeal to existing and potential investors. The dialogue initiated by O'Leary and supported by Payne is not just about the monetary figures but about the broader implications for New York's future as a hub for innovation and development.
In conclusion, the themes of investment climate attrition in New York, contrasted with the appeal of "winner states," capture the current narrative shaped by Kevin O'Leary's cautionary words. His branding of New York as a "loser state" amidst a competitive and ever-evolving national business landscape underscores the challenges and decisions facing real estate developers and investors alike.
This story is not merely about the legal case against Donald Trump but a larger dialogue on the feasibility and wisdom of risking capital in New York's current business environment, which O'Leary and Payne articulate with unmistakable concern.
