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Have you been reading/hearing lately about the ominous incursions of private equity firms edging into various businesses and wreaking havoc? Like health care?
Now, maybe NYC real estate.
A private equity firm might be a New Yorker’s next landlord
Over the past few years, private equity firms have quietly spent hundreds of millions of dollars buying apartments in neighborhoods such as Bushwick, Bedford-Stuyvesant and Williamsburg in Brooklyn and Ridgewood in Queens, property records show.
Their expansion into the housing market across the nation has prompted scrutiny in Congress about whether the trend is amplifying the United States’ affordability problems.
Dozens of tenants who live in buildings already purchased by private equity-backed firms have complained about rent increases and declining maintenance. Many have said they planned to move out. https://www.nytimes.com/2023/08/15/n...ments-nyc.html
Private equity looks for undervalued properties to buy up and then squeeze out whatever value they can find. I doubt there's too much undervalued real estate in NYC, and if they try to squeeze out any more value, they'll likely to run into issues like NYC rent regulation and the already very high free market rents.
I know they bought up a lot of houses in markets that got crushed in the 2008-10 crisis.
There are still nabes that have not been gentrified. Lots of the areas of the Bronx and uptown Manhattan are still filled with lower income minorities. A lot of LLs want to get out of the place because of all the headaches. They just tired and want out, plus COL aint going down, but QOL up here is. If they can get a good enough price, it is time for them to head to Florida.
The market rents are still high in those neighborhoods
Private equity looks for undervalued properties to buy up and then squeeze out whatever value they can find. I doubt there's too much undervalued real estate in NYC, and if they try to squeeze out any more value, they'll likely to run into issues like NYC rent regulation and the already very high free market rents.
I know they bought up a lot of houses in markets that got crushed in the 2008-10 crisis.
I agree. I think all these PE firms will lose money on NYC real estate. The returns are simply not there, plus they do not provide any value-add like a REIT or a developer would.
Have you been reading/hearing lately about the ominous incursions of private equity firms edging into various businesses and wreaking havoc? Like health care?
Now, maybe NYC real estate.
A private equity firm might be a New Yorker’s next landlord
Over the past few years, private equity firms have quietly spent hundreds of millions of dollars buying apartments in neighborhoods such as Bushwick, Bedford-Stuyvesant and Williamsburg in Brooklyn and Ridgewood in Queens, property records show.
Their expansion into the housing market across the nation has prompted scrutiny in Congress about whether the trend is amplifying the United States’ affordability problems.
Dozens of tenants who live in buildings already purchased by private equity-backed firms have complained about rent increases and declining maintenance. Many have said they planned to move out. https://www.nytimes.com/2023/08/15/n...ments-nyc.html
Excellent research.
I have witnessed this behavior for decades. This is why I could never partake in any form of Real Property Investing
like REIT's. I find this type of investing disgusting. All you are doing is benefiting by playing real life monopoly with ordinary folks and not giving a crap about their real life consequences as long as you line your pockets.
Proverbs 30.9 / 6.30-31
To steal is to dishonor God and it is one of the injustices that led to the destruction of the Temple
I have always said do whatever it takes to own your own property. It cuts out the middle man.
Private equity looks for undervalued properties to buy up and then squeeze out whatever value they can find. I doubt there's too much undervalued real estate in NYC, and if they try to squeeze out any more value, they'll likely to run into issues like NYC rent regulation and the already very high free market rents.
I know they bought up a lot of houses in markets that got crushed in the 2008-10 crisis.
In this case, maybe it might be a situation not of the property being overvalued, but that it's a market where there is enough desperation that people will allow themselves to be over-charged?
That suggests that there is significant headroom in people's ability to pay higher rents over what people are paying now. Given what's been happening in real estate I. NYC, not knowing what's happening in specific buildings , I don't see it on a widespread basis. There's been a lot of outflow from NYC because of the cost of living.
Quote:
Originally Posted by Cida
In this case, maybe it might be a situation not of the property being overvalued, but that it's a market where there is enough desperation that people will allow themselves to be over-charged?
That suggests that there is significant headroom in people's ability to pay higher rents over what people are paying now. Given what's been happening in real estate I. NYC, not knowing what's happening in specific buildings , I don't see it on a widespread basis. There's been a lot of outflow from NYC because of the cost of living.
But the thing about Manhattan is that there will always be people who are willing to pay insane prices.
Okay, maybe it won't be widespread, but enough to be an unpleasant, unethical trend.
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