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Tag Archives: property
Gov. Greg Abbott calls for legislative action on school choice, property taxes and fentanyl in State of the State – The Texas Tribune
- Gov. Greg Abbott calls for legislative action on school choice, property taxes and fentanyl in State of the State The Texas Tribune
- Property tax cuts, school choice among Abbott’s emergency items. How that compares to other Texas leaders KXAN.com
- VERIFY: Fact-checking Gov. Greg Abbott’s State of the State address, Democratic response KHOU.com
- Texas’ Abbott uses televised address to target border, crime Yahoo News
- WATCH: Full State of the State as Abbott announces 7 ’emergency priorities’ KXAN.com
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New Lamborghini supercar leaked intellectual property database
Lamborghini is expected to reveal its next supercar in March, but a sneak peek may have slipped out.
The automaker filed a new car design with the World Intellectual Property Organization (WIPO) that included several sketches of the vehicle.
The Global Design Database is a library that acts as protection for the designs of various products.
The filing was first spotted by Motor 1, which grabbed the images, but they have since been removed from the WIPO website.
OFF-ROAD LAMBORGHINI HURACAN STERRATO SUPERCAR MARKS THE END OF AN ERA
Sketches of Lamborghini’s next supercar have been filed with the World Intellectual Property Organization.
(Lamborghini)
Lamborghini told Fox News Digital it had no comment.
The black-and-white line drawings depict a mid-engine coupe similar to the Lamborghini Aventador that went out of production next year, which it would be set to replace.
The new car features hexagonal exhausts.
(Lamborghini)
It maintains the Aventador’s wedge-shaped design, sharp creases and deeply-sculpted side air intakes.
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A mid-mounted engine can clearly be seen through a transparent cover, reconfirming that it will be powered by a V12 engine with hybrid assist, as Lamborghini has said, breathing through hexagonal exhausts.
The Lamborghini Aventador Ultimae was the last version of the Aventador.
(Martyn Lucy/Getty Images)
The brand is phasing out its pure internal-combustion engine powertrain and plans to have an all-hybrid lineup by 2025. Even before the car is fully revealed, it’s already a hit.
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Lamborghini CEO Stephan Winkelmann recently said it already has over 3,000 orders for the car and that it has enough reservations for its entire lineup to cover production into mid-2024.
Texas to resume border wall construction after reaching deals with private property owners, Abbott says
The Texas government will resume construction of a wall on the state’s border with Mexico, according to Gov. Greg Abbott.
The announcement comes after an extended period of negotiation between Texas officials and private property owners for the construction of infrastructure on their land.
BIDEN ADMIN SUES ARIZONA OVER CREATION OF SHIPPING CONTAINER BORDER WALL TO STOP ILLEGAL IMMIGRATION
A pair of migrant families from Brazil pass through a gap in the border wall to reach the United States after crossing from Mexico to Yuma, Arizona, to seek asylum.
(AP Photo/Eugene Garcia, File)
“More border wall is going up next month,” said Abbott. “It took months to negotiate with private property owners on the border for the right to build on their property.
He added, “We now should be building more border wall all of next year.”
TEXANS SHARE THEIR CONCERN OVER LIFTING TITLE 42
The border wall construction project has been under development for months after the Texas Facilities Commission approved a $167 million contract with Southwest Valley Constructors Co. The project is intended to erect a nearly seven-mile border wall in the Del Rio area.
A second contract was also inked with construction company BFBC of Texas to construct a separate seven-mile wall in the Rio Grande Valley.
LOCAL TEXAS LEADERS MAKE AN APPEAL TO ENACT CHANGE AT THE BORDER: ‘NO ONE’S LISTENING’
Texas Gov. Greg Abbott.
(Yasin Ozturk/Anadolu Agency via Getty Images)
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President Biden’s administration on Wednesday sued the state of Arizona over its construction of a makeshift border wall using shipping containers and razor wire in order to prevent the flow of illegal immigrants — with the administration claiming the state is trespassing on federal lands.
The lawsuit, filed in U.S. District Court, says that the installation of multi-ton shipping containers, welded shut and topped with razor wire, “damage[s] federal lands, threaten[s] public safety, and impede[s] the ability of federal agencies and officials, including law enforcement personnel, to perform their official duties.”
Texas and other states are bracing for the expiration of Title 42 Wednesday, which will go forward after the U.S. Court of Appeals for the District of Columbia Circuit declined Friday to keep the Trump-era policy that restricts the number of asylum seekers the U.S. would allow under the COVID-19 pandemic.
Fox News’ Adam Shaw contributed to this report.
Blackstone’s $69 bln REIT curbs redemptions in blow to property empire
NEW YORK, Dec 1 (Reuters) – Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth.
The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone’s earnings. Blackstone shares ended trading down 7.1% on the news.
Many investors in the REIT are concerned that Blackstone has been slow to adjust the vehicle’s valuation to that of publicly traded REITs that have taken a hit amid rising interest rates, a source close to the fund said. Rising interest rates weigh on real estate values because they make financing properties more expensive.
Blackstone has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast to the publicly traded Dow Jones U.S. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period.
That outperformance has some investors questioning how Blackstone comes up with the valuation of its REIT, said Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia.
“People are taking profits at the value Blackstone says their REIT shares are at,” said Snyder.
A Blackstone spokesperson declined to comment on how the New York-based firm calculates the valuation of its REIT, but said its portfolio was concentrated in rental housing and logistics in the southern and western United States that have short duration leases and rents outpacing inflation.
The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient.
“Our business is built on performance, not fund flows, and performance is rock solid,” the spokesperson said.
The REIT is marketed to wealthy individual investors. Two sources familiar with the matter said turmoil in Asian markets, fueled by concerns about China’s economic prospects and political stability, contributed to the redemptions. The majority of investors redeeming were from Asia and needed the liquidity, they said.
Blackstone told investors in a letter it would curb withdrawals from its REIT after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors’ repurchase requests.
Some analysts said Blackstone’s REIT runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. On Thursday, the firm said the REIT had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27 billion.
“The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog — too early to tell, in our view,” BMO Capital Markets analysts wrote in a note.
BLOW TO BLACKSTONE’S PLANS
The REIT turmoil is a setback for two of Blackstone’s strategies that helped it become the world’s biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals.
Blackstone launched the REIT in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. Its president Jonathan Gray was elevated and made successor to Chief Executive Stephen Schwarzman as a result of his success in property investing.
The REIT also represented a bid to win over high net-worth investors clamoring for private market products, which they believe perform better than those that are publicly traded.
Blackstone has been seeking to diversify its investor base after tapping institutional investors, such as public pension funds, insurance firms and sovereign wealth funds, for its products for decades.
Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year.
Credit Suisse analysts wrote in a note that they expected the REIT’s woes to weigh on Blackstone’s fee-related earnings and assets under management. “These all will continue put pressure on Blackstone’s premium valuation,” they wrote.
On Blackstone’s third-quarter earnings call in October, Gray blamed REIT redemptions on market volatility, which he said had driven away individual investors from active equity and fixed income funds.
He added that the REIT had ample cash reserves to “weather pretty much any storm.” These cash reserves totaled $2.7 billion as of the end of October, according to its prospectus.
“It’s not a surprise that you would see a deceleration in flows from individual investors when you’ve had this kind of market decline,” Gray said.
Reporting by Chibuike Oguh and Herb Lash in New York; Editing by Rosalba O’Brien and Sam Holmes
Our Standards: The Thomson Reuters Trust Principles.
Blackstone limits withdrawals at $125bn property fund as investors rush to exit
Blackstone has limited withdrawals from its $125bn real estate investment fund following a surge in redemption requests, as investors clamour to get their hands on cash and concerns grow about the long-term health of the commercial property market.
The private equity group approved only 43 per cent of redemption requests in its Blackstone Real Estate Income Trust fund in November, according to a notice it sent to investors on Thursday. Shares in Blackstone fell as much as 8 per cent.
The withdrawal limit underscores the risks wealthy individuals have taken by investing in Blackstone’s mammoth private real estate fund, which — after accounting for debt — owns $69bn in net assets, spanning logistics facilities, apartment buildings, casinos and medical office parks.
About 70 per cent of redemption requests have come from Asia, according to people familiar with the matter, an outsized share considering non-US investors account for only about 20 per cent of BREIT’s total assets.
One partner in the fund told the Financial Times that the poor recent performance of Asian markets and economies may have put pressure on investors, who now need cash to meet their obligations.
In the US, commercial property is under pressure from rising inflation and interest rates, according to a recent report from the National Association of Realtors. Globally, the mood in property has darkened and some high profile investors have warned of a lack of finance in parts of the sector.
The surge in redemption requests come as Blackstone announced the sale of its near 50 per cent interest in the MGM Grand Las Vegas and Mandalay Bay Resort casinos in Las Vegas for $1.27bn. Including debt, the deal valued the properties at more than $5bn.
Proceeds from the sale, which was agreed at a premium to the carrying values of the properties, will help with liquidity for BREIT as it meets redemption requests — or be reinvested in faster-growing property assets, said a person familiar with the matter.
In October, BREIT received $1.8bn in redemption requests, or about 2.7 per cent of its net asset value, and has already received redemption requests in November and December exceeding the quarterly limit.
It allowed investors to withdraw $1.3bn in November, or just 43 per cent of the redemption requests it received. Blackstone would allow investors to redeem just 0.3 per cent of the fund’s net assets this month, it added in the notice.
Private capital managers have increasingly turned to retail investors, arguing that high-net worth investors should have the same ability as pension and sovereign wealth funds to diversify away from public markets. Part of the pitch that money managers make is that, by giving up some liquidity rights, higher returns can be achieved.
The BREIT fund allows for 2 per cent of assets to be redeemed by clients each month, with a maximum of 5 per cent allowed in a calendar quarter. The fund has retuned over 9 per cent in the 9 months to the end of September, due to rising rents from the properties and dividend payments.
Its increase in value is in contrast to publicly traded real estate investment trusts, which have declined sharply in value in line with falling stock markets.
In recent years, the fund has been one of the big sources of Blackstone’s growth in assets under management, alongside a private credit fund called BCRED. In recent quarters, rising redemption requests from both funds have worried analysts as a signal of stalling asset growth.
“Our business is built on performance, not fund flows, and performance is rock solid,” said Blackstone in a statement sent to the Financial Times that emphasised the fund’s concentration in rental housing and logistics in fast-growing areas of the US and its predominantly fixed rate liabilities.
20 dividend stocks with high yields that have become more attractive right now
Income-seeking investors are looking at an opportunity to scoop up shares of real estate investment trusts. Stocks in that asset class have become more attractive as prices have fallen and cash flow is improving.
Below is a broad screen of REITs that have high dividend yields and are also expected to generate enough excess cash in 2023 to enable increases in dividend payouts.
REIT prices may turn a corner in 2023
REITs distribute most of their income to shareholders to maintain their tax-advantaged status. But the group is cyclical, with pressure on share prices when interest rates rise, as they have this year at an unprecedented scale. A slowing growth rate for the group may have also placed a drag on the stocks.
And now, with talk that the Federal Reserve may begin to temper its cycle of interest-rate increases, we may be nearing the time when REIT prices rise in anticipation of an eventual decline in interest rates. The market always looks ahead, which means long-term investors who have been waiting on the sidelines to buy higher-yielding income-oriented investments may have to make a move soon.
During an interview on Nov 28, James Bullard, president of the Federal Reserve Bank of St. Louis and a member of the Federal Open Market Committee, discussed the central bank’s cycle of interest-rate increases meant to reduce inflation.
When asked about the potential timing of the Fed’s “terminal rate” (the peak federal funds rate for this cycle), Bullard said: “Generally speaking, I have advocated that sooner is better, that you do want to get to the right level of the policy rate for the current data and the current situation.”
In August we published this guide to investing in REITs for income. Since the data for that article was pulled on Aug. 24, the S&P 500
SPX,
-0.50%
has declined 4% (despite a 10% rally from its 2022 closing low on Oct. 12), but the benchmark index’s real estate sector has declined 13%.
REITs can be placed broadly into two categories. Mortgage REITs lend money to commercial or residential borrowers and/or invest in mortgage-backed securities, while equity REITs own property and lease it out.
The pressure on share prices can be greater for mortgage REITs, because the mortgage-lending business slows as interest rates rise. In this article we are focusing on equity REITs.
Industry numbers
The National Association of Real Estate Investment Trusts (Nareit) reported that third-quarter funds from operations (FFO) for U.S.-listed equity REITs were up 14% from a year earlier. To put that number in context, the year-over-year growth rate of quarterly FFO has been slowing — it was 35% a year ago. And the third-quarter FFO increase compares to a 23% increase in earnings per share for the S&P 500 from a year earlier, according to FactSet.
The NAREIT report breaks out numbers for 12 categories of equity REITs, and there is great variance in the growth numbers, as you can see here.
FFO is a non-GAAP measure that is commonly used to gauge REITs’ capacity for paying dividends. It adds amortization and depreciation (noncash items) back to earnings, while excluding gains on the sale of property. Adjusted funds from operations (AFFO) goes further, netting out expected capital expenditures to maintain the quality of property investments.
The slowing FFO growth numbers point to the importance of looking at REITs individually, to see if expected cash flow is sufficient to cover dividend payments.
Screen of high-yielding equity REITs
For 2022 through Nov. 28, the S&P 500 has declined 17%, while the real estate sector has fallen 27%, excluding dividends.
Over the very long term, through interest-rate cycles and the liquidity-driven bull market that ended this year, equity REITs have fared well, with an average annual return of 9.3% for 20 years, compared to an average return of 9.6% for the S&P 500, both with dividends reinvested, according to FactSet.
This performance might surprise some investors, when considering the REITs’ income focus and the S&P 500’s heavy weighting for rapidly growing technology companies.
For a broad screen of equity REITs, we began with the Russell 3000 Index
RUA,
-0.18%,
which represents 98% of U.S. companies by market capitalization.
We then narrowed the list to 119 equity REITs that are followed by at least five analysts covered by FactSet for which AFFO estimates are available.
If we divide the expected 2023 AFFO by the current share price, we have an estimated AFFO yield, which can be compared with the current dividend yield to see if there is expected “headroom” for dividend increases.
For example, if we look at Vornado Realty Trust
VNO,
+1.01%,
the current dividend yield is 8.56%. Based on the consensus 2023 AFFO estimate among analysts polled by FactSet, the expected AFFO yield is only 7.25%. This doesn’t mean that Vornado will cut its dividend and it doesn’t even mean the company won’t raise its payout next year. But it might make it less likely to do so.
Among the 119 equity REITs, 104 have expected 2023 AFFO headroom of at least 1.00%.
Here are the 20 equity REITs from our screen with the highest current dividend yields that have at least 1% expected AFFO headroom:
| Company | Ticker | Dividend yield | Estimated 2023 AFFO yield | Estimated “headroom” | Market cap. ($mil) | Main concentration |
| Brandywine Realty Trust |
BDN, +1.82% |
11.52% | 12.82% | 1.30% | $1,132 | Offices |
| Sabra Health Care REIT Inc. |
SBRA, +2.02% |
9.70% | 12.04% | 2.34% | $2,857 | Health care |
| Medical Properties Trust Inc. |
MPW, +1.90% |
9.18% | 11.46% | 2.29% | $7,559 | Health care |
| SL Green Realty Corp. |
SLG, +2.18% |
9.16% | 10.43% | 1.28% | $2,619 | Offices |
| Hudson Pacific Properties Inc. |
HPP, +1.55% |
9.12% | 12.69% | 3.57% | $1,546 | Offices |
| Omega Healthcare Investors Inc. |
OHI, +1.30% |
9.05% | 10.13% | 1.08% | $6,936 | Health care |
| Global Medical REIT Inc. |
GMRE, +2.03% |
8.75% | 10.59% | 1.84% | $629 | Health care |
| Uniti Group Inc. |
UNIT, +0.28% |
8.30% | 25.00% | 16.70% | $1,715 | Communications infrastructure |
| EPR Properties |
EPR, +0.62% |
8.19% | 12.24% | 4.05% | $3,023 | Leisure properties |
| CTO Realty Growth Inc. |
CTO, +1.58% |
7.51% | 9.34% | 1.83% | $381 | Retail |
| Highwoods Properties Inc. |
HIW, +0.76% |
6.95% | 8.82% | 1.86% | $3,025 | Offices |
| National Health Investors Inc. |
NHI, +1.90% |
6.75% | 8.32% | 1.57% | $2,313 | Senior housing |
| Douglas Emmett Inc. |
DEI, +0.33% |
6.74% | 10.30% | 3.55% | $2,920 | Offices |
| Outfront Media Inc. |
OUT, +0.70% |
6.68% | 11.74% | 5.06% | $2,950 | Billboards |
| Spirit Realty Capital Inc. |
SRC, +0.72% |
6.62% | 9.07% | 2.45% | $5,595 | Retail |
| Broadstone Net Lease Inc. |
BNL, -0.93% |
6.61% | 8.70% | 2.08% | $2,879 | Industial |
| Armada Hoffler Properties Inc. |
AHH, -0.08% |
6.38% | 7.78% | 1.41% | $807 | Offices |
| Innovative Industrial Properties Inc. |
IIPR, +1.09% |
6.24% | 7.53% | 1.29% | $3,226 | Health care |
| Simon Property Group Inc. |
SPG, +0.95% |
6.22% | 9.55% | 3.33% | $37,847 | Retail |
| LTC Properties Inc. |
LTC, +1.09% |
5.99% | 7.60% | 1.60% | $1,541 | Senior housing |
| Source: FactSet | ||||||
Click on the tickers for more about each company. You should read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
The list includes each REIT’s main property investment type. However, many REITs are highly diversified. The simplified categories on the table may not cover all of their investment properties.
Knowing what a REIT invests in is part of the research you should do on your own before buying any individual stock. For arbitrary examples, some investors may wish to steer clear of exposure to certain areas of retail or hotels, or they may favor health-care properties.
Largest REITs
Several of the REITs that passed the screen have relatively small market capitalizations. You might be curious to see how the most widely held REITs fared in the screen. So here’s another list of the 20 largest U.S. REITs among the 119 that passed the first cut, sorted by market cap as of Nov. 28:
| Company | Ticker | Dividend yield | Estimated 2023 AFFO yield | Estimated “headroom” | Market cap. ($mil) | Main concentration |
| Prologis Inc. |
PLD, +1.29% |
2.84% | 4.36% | 1.52% | $102,886 | Warehouses and logistics |
| American Tower Corp. |
AMT, +0.68% |
2.66% | 4.82% | 2.16% | $99,593 | Communications infrastructure |
| Equinix Inc. |
EQIX, +0.62% |
1.87% | 4.79% | 2.91% | $61,317 | Data centers |
| Crown Castle Inc. |
CCI, +1.03% |
4.55% | 5.42% | 0.86% | $59,553 | Wireless Infrastructure |
| Public Storage |
PSA, +0.11% |
2.77% | 5.35% | 2.57% | $50,680 | Self-storage |
| Realty Income Corp. |
O, +0.26% |
4.82% | 6.46% | 1.64% | $38,720 | Retail |
| Simon Property Group Inc. |
SPG, +0.95% |
6.22% | 9.55% | 3.33% | $37,847 | Retail |
| VICI Properties Inc. |
VICI, +0.41% |
4.69% | 6.21% | 1.52% | $32,013 | Leisure properties |
| SBA Communications Corp. Class A |
SBAC, +0.59% |
0.97% | 4.33% | 3.36% | $31,662 | Communications infrastructure |
| Welltower Inc. |
WELL, +2.37% |
3.66% | 4.76% | 1.10% | $31,489 | Health care |
| Digital Realty Trust Inc. |
DLR, +0.69% |
4.54% | 6.18% | 1.64% | $30,903 | Data centers |
| Alexandria Real Estate Equities Inc. |
ARE, +1.38% |
3.17% | 4.87% | 1.70% | $24,451 | Offices |
| AvalonBay Communities Inc. |
AVB, +0.89% |
3.78% | 5.69% | 1.90% | $23,513 | Multifamily residential |
| Equity Residential |
EQR, +1.10% |
4.02% | 5.36% | 1.34% | $23,503 | Multifamily residential |
| Extra Space Storage Inc. |
EXR, +0.29% |
3.93% | 5.83% | 1.90% | $20,430 | Self-storage |
| Invitation Homes Inc. |
INVH, +1.58% |
2.84% | 5.12% | 2.28% | $18,948 | Single-family residental |
| Mid-America Apartment Communities Inc. |
MAA, +1.46% |
3.16% | 5.18% | 2.02% | $18,260 | Multifamily residential |
| Ventas Inc. |
VTR, +1.63% |
4.07% | 5.95% | 1.88% | $17,660 | Senior housing |
| Sun Communities Inc. |
SUI, +2.09% |
2.51% | 4.81% | 2.30% | $17,346 | Multifamily residential |
| Source: FactSet | ||||||
Simon Property Group Inc.
SPG,
+0.95%
is the only REIT to make both lists.
UK property demand down 44% since market-rocking mini budget: Zoopla
Estate agents “Sold” and “For Sale” signs outside residential properties in the Maida Vale district of London, UK, on Thursday, June 30, 2022.
Bloomberg | Bloomberg | Getty Images
Demand for U.K. residential properties has nearly halved following September’s government budget that spooked financial markets and toppled the prime minister, research Monday showed.
The fiscal package, announced Sept. 23, caused a sell-off in bonds and led to predictions of a potential housing market crash as interest rate expectations rose sharply. In the wake of the budget, a record number of mortgage deals were pulled and many lenders paused offerings as they assessed the volatility.
Buyer demand fell 44% year-on-year in the four weeks to Nov. 20, according to property website Zoopla, while new property sales declined 28%. The stock of homes for sale was up 40% over the same period.
Zoopla said demand had fallen to levels usually seen over Christmas — among the quietest time for property markets — as buyers waited to assess the outlook for mortgages, along with their own jobs and wages.
Richard Donnell, Zoopla’s executive director for research, said the company expected house price falls of up to 5% in 2023.
“But the number of sales going through will remain buoyant for a range of structural, demographic and economic factors,” he said, including ongoing housing scarcity, with the average number of homes on offer per estate agency still a fifth lower than before the pandemic.
Although a fall in house prices is widely predicted, the company’s predictions are less bearish than others.
Economists at Pantheon Macroeconomics forecast a decline of 8% over the next year, while Nationwide, one of the U.K.’s largest mortgage providers, said earlier this month that house prices could collapse by up to 30% in its worst-case scenario.
In contrast, the U.K.’s Office for Budget Responsibility has said it expects house prices to drop 1.2% next year and by 5.7% in 2024.
It comes after a desire for different kinds of property during the pandemic, the suspension of a purchase tax on homes under $500,000 from July 2020 to July 2021 and ongoing supply shortages saw house prices rocket to record highs.
Zoopla said there was currently a “widespread” repricing of homes occurring, but that it was modest in size. It puts U.K. house price growth at 7.8% year-on-year.
Its report described market trends as a “shake-out rather than a pre-cursor to a housing crash” and said the mini budget had “delivered a shock” to sellers and buyers.
“All the leading supply and demand indicators we measure continue to point to a rapid slowdown from very strong market conditions. We do not see any evidence of forced sales or the need for a large, double digit reset in U.K. house prices in 2023,” its report said.
Meanwhile, private rental costs in Britain have risen to record highs amid intense competition for properties, according to separate data published by the website Rightmove last month.
It found rents in London were up 16.1% year-on-year, the highest growth of any region on record.
Exclusive: Bankman-Fried’s FTX, parents bought Bahamas property worth $121 million
NEW PROVIDENCE, Bahamas, Nov 22 (Reuters) – Sam Bankman-Fried’s FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show.
Most of FTX’s purchases were luxury beachfront homes, including seven condominiums in an expensive resort community called Albany, costing almost $72 million. The deeds show these properties, bought by a unit of FTX, were to be used as “residence for key personnel” of the company. Reuters could not determine who lived in the apartments.
The documents for another home with beach access in Old Fort Bay — a gated community that was once home to a British colonial fort built in the 1700s to protect against pirates — show Bankman-Fried’s parents, Stanford University law professors Joseph Bankman and Barbara Fried, as signatories. The property, one of the documents dated June 15 said, is for use as a “vacation home.”
When asked by Reuters why the couple decided to buy a vacation home in the Bahamas and how it was paid for — whether in cash, with a mortgage or by a third party such as FTX — a spokesman for the professors said only that Bankman and Fried had been trying to return the property to FTX.
“Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company and are awaiting further instructions,” the spokesperson said, declining to elaborate.
While it is known that FTX and its employees bought real estate in the Bahamas, where it established its headquarters in September last year, the property records seen by Reuters show for the first time the scale of their buying spree and the intended use of some of the real estate.
FTX, which filed for bankruptcy earlier this month after a rush of customer withdrawals, did not respond to a request for comment. Bankman-Fried did not respond to requests for comment.
Bankman-Fried has told Reuters he lived in a house with nine other colleagues. For his employees, he said FTX provided free meals and an “in-house Uber-like” service around the island.
The collapse of FTX, one of the world’s largest crypto currency exchanges, has left an estimated 1 million creditors facing losses totalling billions of dollars. Reuters has reported Bankman-Fried secretly used $10 billion in customer funds to prop up his trading business, and that at least $1 billion of those deposits had vanished.
In a U.S. court filing with the District of Delaware bankruptcy court earlier this month, John Ray, FTX’s new chief executive, said he understood that corporate funds of the FTX Group were used to “purchase homes and other personal items for employees and advisors.”
Reuters could not determine the source of funds that FTX and its executives used to buy these properties.
PROPERTY PURCHASES
Reuters searched property records at the Bahamas Registrar General’s Department for FTX, Bankman-Fried, his parents and some of the company’s key executives.
FTX Property Holdings Ltd, an FTX unit, bought 15 properties worth nearly $100 million in 2021 and 2022.
Its most expensive purchase was a $30 million penthouse at the Albany, a resort where Tiger Woods hosts a golf tournament every year. The property records for the penthouse, dated March 17, were signed by Ryan Salame, the president of FTX Property, and showed it was intended as “residence for key personnel.”
Salame did not respond to a request for comment.
Other high-end real estate purchases include three condominiums at One Cable Beach, a beachfront residence in New Providence. Records showed the condominiums cost between $950,000 and $2 million and were bought by Nishad Singh, the former head of engineering at FTX, Gary Wang, an FTX co-founder, and Bankman-Fried for residential use.
Singh and Wang did not respond to requests for comment.
Two of FTX Property’s real estate holdings were marked for commercial use – an $8.55 million cluster of houses that served as FTX’s headquarters, and a 4.95-acre plot of land on the coastline overlooking cyan waters that was also meant to be developed into office space for the crypto exchange.
The FTX headquarters is now unoccupied, with furniture pushed against some windows. Its signage has been removed. The plot of land, which cost $4.5 million, also lies empty.
A security guard said employees did not return to the headquarters after leaving earlier this month.
Reporting by Koh Gui Qing; editing by Paritosh Bansal and Claudia Parsons
Our Standards: The Thomson Reuters Trust Principles.
Shares sobered by Fed warning, China acts on property
SYDNEY/LONDON, Nov 14 (Reuters) – Share markets continued last week’s rally in more modest fashion on Monday after a top U.S. central banker warned investors against getting carried away over one inflation number, while Chinese stocks gained on aid for the country’s property sector.
A modest miss on U.S. inflation was enough to see two-year Treasury yields dive 33 basis points for the week and the dollar lose almost 4% – the fourth biggest weekly decline since the era of free-floating exchange rates began over 50 years ago.
However, the resulting easing in U.S. financial conditions was not entirely welcomed by the Federal Reserve, with Governor Christopher Waller saying on Sunday it would take a string of soft reports for the bank to take its foot off the brakes.
Waller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace.
Futures are wagering heavily on a half-point rate rise to 4.25-4.5% in December, and then a couple of quarter-point moves to a peak in the 4.75-5.0% range.
Two-year yields edged down to 4.39%, after diving as deep as 4.29% on Friday.
“The CPI downside surprise aligns with a broad range of indicators pointing to a downshift in global inflation that should encourage a moderation in the pace of monetary policy tightening at the Fed and elsewhere,” said Bruce Kasman, head of economic research at JPMorgan.
“This positive message needs be tempered by the recognition that downshift in inflation will be too little for central banks to declare mission-accomplished, and more tightening is likely on the way.”
The benchmark European STOXX index rose 0.37% (.STOXX), and MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.73%, after jumping 7.7% last week.
U.S. markets looked set to open lower, with S&P E-mini futures down 0.26% .
EYES ON CHINA
Dealers were also waiting to see if Chinese stocks could extend their big rally amid reports regulators have asked financial institutions to extend more support to stressed property developers. read more
China’s real estate index (.CSI000952) jumped 3.5% in response. Blue chips (.CSI300) rose 1%, helped by a slew of changes to China’s COVID curbs, even as the country reported more cases over the weekend. read more
“It’s hard to see how the case news is anything but negative from an economic standpoint, but it’s the symbolism of the movement, however small, in the zero COVID strategy that markets are happily latching onto,” said Ray Attrill, head of FX strategy at NAB.
The support for China’s property sector, which consumes a vast amount of metals, boosted copper towards a five-month high. Three-month copper on the London Metal Exchange (LME) rose 0.3% at $8,519 a tonne by 0725 GMT.
U.S. President Joe Biden will meet Chinese leader Xi Jinping in person on Monday for the first time since taking office, with U.S. concerns over Taiwan, Russia’s war in Ukraine and North Korea’s nuclear ambitions on top of his agenda.
The news on COVID rules had stoked a short-covering bounce in the yuan, which added to broad pressure on the dollar as yields dived. The yuan was set 1.4% firmer on Monday – the largest such move since 2005.
The dollar index moved down a fraction on Monday at 106.69 , still well short of last week’s 111.280 top.
The euro eased a touch to $1.0308 , after climbing 3.9% last week, while the dollar firmed to 139.56 yen following last week’s 5.4% drubbing.
The dollar lost almost as much to the Swiss franc , steered in part by warnings from the Swiss National Bank that it would use rates and currency purchases to tame inflation.
Sterling eased back to $1.1755 ahead of the British Chancellor’s Autumn Statement on Thursday, where he is expected to set out tax rises and spending cuts.
Crypto currencies remained under pressure as at least $1 billion of customer funds were reported to have vanished from collapsed crypto exchange FTX.
Bitcoin recovered 2.9% at $16,785 , having shed almost 22% last week.
Oil prices pared earlier gains and fell on Monday, after hopes of a boost in China demand were offset by the firmer U.S. dollar. Brent crude futures were down 32 cents, or 0.3%, to $95.67 a barrel by 0725 GMT after settling up 1.1% on Friday
Reporting by Wayne Cole and Lawrence White; Editing by Shri Navaratnam, Kenneth Maxwell, William Maclean
Our Standards: The Thomson Reuters Trust Principles.