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Buyers Are Looking For Better Deals And Sellers Thinking, Why Do I Give My Property Away Now?

A report from Bloomberg. “The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday. ‘Business leverage now stands near historical highs,’ the central bank said in its semi-annual Monetary Policy Report to Congress. ‘Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.'”

“In particular, it said that commercial real estate prices ‘appear susceptible to sharp declines’ from historically high levels. That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said.”

From Yahoo News. “The continued acceleration in Chapter 11 filings is a clear sign that business owners should prepare for the pandemic’s impact to last longer than was originally planned. Chapter 11 bankruptcy filings increased again in the fourth quarter, as seen in the newest Polsinelli-TrBK Distress Indices Report.”

“‘We always knew the ongoing pandemic would create a rapid rise in Chapter 11 filings, but we didn’t expect that the filing data would look so similar to the recession of 2011. However, we do anticipate more general filings and distress throughout 2021, with spikes in real estate and health care,’ said Jeremy Johnson, a bankruptcy and restructuring attorney. ‘We recommend that companies avoid filing unless it’s a defense matter (disallowing a creditor from taking enforcement action) or offensive (to implement a deal with lenders or other creditors).'”

The Hartford Courant. “The Capital Region Development Authority — the quasi-public agency which has pumped tens of millions of state taxpayer-backed dollars into apartment projects in and around downtown Hartford— will lose a $5 million investment now that a New York lender which financed the bulk of a rental conversion at downtown’s Red Lion Hotel has foreclosed on the property.”

“The loss is the first major one for CRDA, which has helped finance more than 1,500 units since it was founded in 2012. At the Red Lion Hotel, the developer, Inner Circle US, defaulted on the primary loan financing the conversion of the top nine floors into 96 apartments. Inner Circle ran into heavy cost overruns that stalled the project for two years.”

The Real Deal on New York. “Westchester County developer DeNardo Capital filed for Chapter 11 bankruptcy Tuesday, stopping a planned foreclosure auction on its luxury condo project. Greenwich, Connecticut–based SilverPoint Capital was planning a UCC foreclosure sale on interests in the Marker 27 project in Irvington, New York. The sale was scheduled for Feb. 18, according to marketing materials.”

“While a moratorium on traditional commercial foreclosures is in place, lenders are allowed to proceed with UCC foreclosures as these actions can bypass state courts. Other New York developers have filed for bankruptcy to avoid a UCC foreclosure. For example, the owner of the Tillary Hotel in downtown Brooklyn filed for Chapter 11 in December the same day that a UCC foreclosure sale was planned.”

The Commercial Observer. “Coworking giant WeWork has closed its location at 25 Broadway nearly eight years after it first signed on for the space, the company confirmed. WeWork has shed locations around the country in recent months to try to achieve profitability by the end of this year. A source familiar with WeWork’s financials previously told CO WeWork cut its cash burn nearly in half as of the third quarter of 2020 and reduced its long-term lease liabilities by more than $1.5 billion.”

From Bisnow. “A string of hotel bankruptcy cases have been filed in the last two months, and hospitality finance experts believe this trend will continue to increase as owners of still-struggling hotels remain unable to pay their debt service and lenders are less flexible than they were a year ago. Every day that passes with hotel occupancies remaining low means more lenders leaning toward foreclosing on properties.”

“‘One of the reasons we’re starting to see increased activity in terms of foreclosures now is lenders don’t have the same sense of patience, and they don’t have much confidence in a sharp rebound,’ said Herrick Feinstein, a New York-based bankruptcy lawyer.”

“The average occupancy rate for all U.S. hotels during the week ending Feb. 6 was 40.9%, according to STR, down more than 30% from the same time last year. Average daily rate was down 29% from 2020 levels. Revenue per available room, a key hotel performance metric that can determine whether a property is profitable, was down 50.6% from last year.”

The Chicago Tribune in Illinois. “A Bucktown property that was featured on ‘Windy City Rehab,’ but did not end up being renovated on the HGTV show, sold last week after nearly a year on the market, a major price cut and a tree dispute. The gutted three-unit building at 1846 N. Damen Ave. sold Feb. 12 for $575,000 to a developer that also purchased a neighboring property for $575,000, real estate agent Vincent Anzalone said.”

“The property at 1846 N. Damen Ave., which also features two residential units, went on the market in March 2020 for $999,000. Hot N Cold LLC purchased it for $949,000 in February 2019, online records show. Alison Victoria Gramenos is the host of ‘Windy City Rehab,’ which follows her as she purchases, renovates and flips Chicago homes. Gramenos said on the Season 2 finale she was selling the Damen property to ‘stop the bleeding.’ She hoped to break even.”

“Gramenos and Eckhardt, meanwhile, are facing fraud lawsuits from a Lincoln Square couple who purchased a home featured on the first season; and a family of investors who said they were not properly repaid. Other litigation has been dropped. HGTV has not announced if ‘Windy City Rehab’ will return for a third season.”

From Socket Site in California. “Leasing activity across a sample of ten of the larger apartment buildings we’re tracking in San Francisco has ticked up, driving the average vacancy rate for the cross section of 3,600 units down to around 7.5 percent, driven by aggressive discounting and incentives to sign a new lease. There are still 140 percent more apartments listed for rent in San Francisco than there were at the same time last year and asking rents remain down an average of 25 percent on a year-over-year basis, and 35 percent below a 2015-era peak, with the average asking rent for a studio having slipped under $1,900 a month for the first time since 2010.”

The Moorpark Acorn in California. “‘2020 was another good year for Moorpark on the industrial side. The market was really strong with very few buildings available,’ said Mike Tingus, a commercial real estate broker and president of Lee & Associates in Los Angeles and Ventura. ‘(But) the retail world is definitely going to change forever.'”

“A vast majority also expected landlords to make various concessions such as rent relief, extended leases or rent deferral to keep tenants. Ken Simons, a former Moorpark City Council member and vice president of NAI Capital Westlake Village, said he has seen some of these comprises take place as buyers ask for greater discounts during COVID-19 and as landlords build pandemic-related clauses into their leases.”

“‘You have buyers who are looking for better deals and sellers thinking, ‘Why do I give my property away now?’ he said. ‘There have been deferments of payments and there has been waiving of payments. It’s still in transition, and no one knows when we’re going to be out of the pandemic.'”

The Dallas Morning News. “One of North Texas’ largest commercial property firms is planning to cut jobs almost a year after the start of the COVID-19 pandemic. CBRE — the country’s biggest commercial real estate company, which recently shifted its headquarters from California to Dallas — notified the state that it plans to lay off 193 Dallas-area employees starting in April.”

“The COVID-19 pandemic has challenged many sectors of the local real estate market. While residential property sales have boomed and industrial building transactions have set records, other real estate sectors, including office and retail leasing and hotels, have seen sharp declines.”

This Post Has 55 Comments
  1. ‘Business leverage now stands near historical highs,’ the central bank said. ‘Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable’

    The article mentions these clowns have been encouraging leverage.

    ‘In particular, it said that commercial real estate prices ‘appear susceptible to sharp declines’ from historically high levels’

    Yeah, record prices. NYC CRE doubled in price from 2014 to 2016. And the central bank did nothing.

    ‘That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand’

    Already happened. Barn door and all that. Recall the WSJ report that said CRE bonds had been overvalued by as much as 40%, and cash out refinancing was off the chart.

    1. A report from Bloomberg. “The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday. ‘Business leverage now stands near historical highs,’ the central bank said in its semi-annual Monetary Policy Report to Congress. ‘Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.’”

      “The article mentions these clowns have been encouraging leverage.”

      – So, are they admitting that a liquidity crisis is actually a solvency crisis and that a country can’t print their way out of a financial crisis? It cannot be!

      – From the article: “In part encouraged by government and Fed programs, businesses have taken on more debt over the past year as they’ve struggled to deal with the economic and financial fall-out from Covid-19, including in some cases forced shutdowns.”

      – To be fair, the Fed has encouraged reflating the debt bubble since housing bubble 1.0 and the GFC in 2008-2009, which itself was caused by the massive asset bubble they had blown after the dot com bubble collapse. The CCP virus pandemic didn’t cause the current recession, it only popped the bubble that grew out of the Fed’s easy $ policies since the GFC. They’re currently trying to reflate again with even more massive stimulus. Is it different this time? Bubblenomics. Bubbles always pop. The Fed owns this. Tar and feathers would be too good for them. Reference: John Law and the Mississippi Bubble.

      “People actually believe that a few numbskulls with advanced degrees and finance pedigrees can control and manipulate a hopelessly complex 20 trillion dollar economy from the top down with these simple levers of moving interest rates around, printing money, buying securities.  It’s ridiculous.” – Dan Ferris, “When to Buy and When to Sell,” Stansberry Investor Hour, 10:30 mark, November 25, 2020

      “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway

      “You cannot spend your way out of recession or borrow your way out of debt.” – Daniel Hannan, Member of the European Parliament

      ‘I don’t believe there will be another financial crisis in our lifetimes.’ – Janet Yellen, 2017
      “There is no housing bubble” – Ben Bernanke 2006
      ‘We will not have any more crashes in our time.’ – John Maynard Keynes, 1927

      1. “The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.”

        Why the constant nattering over lower prices. Aren’t falling prices exactly what is needed to stimulate the economy into a higher level of activity which is essentially frozen when prices are too high?

        1. “…Aren’t falling prices exactly what is needed to stimulate the economy…

          In other words, deflation.

          Deflation is one of those fightin’ words for those who are in charge of printing money.

  2. ‘the host of ‘Windy City Rehab,’ which follows her as she purchases, renovates and flips Chicago homes. Gramenos said on the Season 2 finale she was selling the Damen property to ‘stop the bleeding’

    These shows are pretty much a fraud. I posted a report about a Boise flipper who got his a$$ kicked years ago. But the TV show said he sold for a mighty profit: they lied.

    1. A house a block away sold a year ago, got a total rehab ($70-80K, looks like), and just sold for $200K over its buy price. I don’t know who bought, but even with the rehab they overpaid by at least $50K.

    2. These shows are pretty much a fraud. I posted a report about a Boise flipper who got his a$$ kicked years ago. But the TV show said he sold for a mighty profit: they lied.

      Yep, it’s all make believe. Same thing happened last bubble peak, and some investigative reporting found that the “sold” properties and “sold price” were lies, that they never did sell.

      1. “People need more loans so they can make their payments!”

        Yep, it’s called a “debt trap” and it is a thing of beauty.

        From the net …

        Q. “What is meant by a debt trap?”

        A. “Technically, a debt trap is a situation where you’re forced to take fresh loans to repay your existing debt obligations. And before you know it, you get stuck in a situation where the amount of debt that you owe takes a turn for the worse and spirals out of control. Such a situation typically arises when your debt obligations exceed your repayment capacity.”

        Note: This debt trap situation is a condition that is self imposed by totally dumbed-down ignorant pukes (much to my delight 😁).

        Moving on …

        “For instance, when the income that you generate is not enough to clear your debt, the interest on the outstanding loan amounts starts to pile up quickly. This forces you to avail fresh loans to clear off the piled up interest, thereby landing you in a debt trap.”

        Go here to read more …

        Debt Trap: What is Meant by Debt Trap? | Angel Broking
        https://www.angelbroking.com/knowledge-center/share-market/debt-trap

        1. I love the sardonic wit of posts by Mr Banker. Hopefully more pukes read this blog and educate themselves, because just like with real estate, we’re not making any more humans in this country. Maybe if the populace wises up we’ll have less bubbles (doubt it though!!).

          BTW, End The Fed.

          1. Get rates back up into the long term historic range of 12%-15% and most of these problems go away on their own.

  3. The gutted three-unit building at 1846 N. Damen Ave. sold Feb. 12 for $575,000 to a developer that also purchased a neighboring property for $575,000, real estate agent Vincent Anzalone said.”

    “The property at 1846 N. Damen Ave., which also features two residential units, went on the market in March 2020 for $999,000. Hot N Cold LLC purchased it for $949,000 in February 2019, online records show.

    Still cheaper than gambling in the stocks market

  4. ‘WeWork cut its cash burn nearly in half as of the third quarter of 2020’

    Call me crazy but making a profit is sort of important.

  5. Very interesting trend – and why would you want to live in San Fran (with the street poop and other things) if you could move a couple hours out. Dropbox has 2800 employees and took a $400M charge just on the HQ location.
    —–
    “Dropbox on Thursday reported a $398.2 million one-time charge in the fourth quarter to reflect the company’s shift to remote work.”

    “Remote work (outside an office) will be the primary experience for all employees and the day-to-day default for individual work,” Dropbox said in a blog post. Some office space will remain for collaboration, and Dropbox will sublease some of the space.

    https://www.cnbc.com/2021/02/18/dropbox-takes-400-million-charge-on-real-estate-as-it-goes-virtual.html

    1. Salesforce last week. And before that …

      I wish we could see the lineage of ownership. So a CRE company, trust or REIT owns the building. Who owns significant shares in those – pension funds? bond funds?


      “Tech companies were among the earliest to tell their employees to work from home when the coronavirus began spreading last year, and some have talked about embracing flexible work permanently. Last May, Facebook Inc., which has about 56,600 employees, said it would be moving to a substantially more remote workforce, and Twitter said it would give all employees the option to stay remote.”
      ——————-
      Salesforce expects more than 65% of its workforce to come into the office only one to three days a week in the future, up from 40% before the pandemic. An unspecified number of additional employees would be fully remote.

      The company is the largest private employer in San Francisco and occupies the city’s tallest building, known as Salesforce Tower, and others with similar names in cities including Indianapolis, New York and Chicago. The company declined to say how much its real-estate footprint might shrink as a result of its changes.

      https://www.wsj.com/articles/most-salesforce-employees-to-work-remotely-at-least-part-time-after-pandemic-11612897201

      1. Will working ‘virtual’ collapse the city & sub-urban real estates? If I am commuting once a week or less I might as well live in ex-burbs or small town, no?

        1. I really cannot extrapolate. But i think real estate in downtowns Silicon Valley, Seattle, NYC, Boston etc might be in trouble first.

          Queen City – is that Charlotte? I think that you will do fine – as folks are looking to get some jobs out of NYC as a money center location.

          1. Yes it’s Charlotte.

            Not only downtown of the cities you mentioned. If the trend continue I have no reason to hang around in bay area paying close to a mil for a starter home.

        2. As long as you have a good internet connection. I work from home and when CA started turning off the power for days at a time and my co-workers in Vietnam were working away no problem , that was a problem.

      2. In October, after thousands of its employees had gotten used to working without being next to their colleagues, Pinterest said it had agreed to pay $89.5 million to stop a lease for 490,000 square feet of office space near its San Francisco headquarters. That way, it wouldn’t have to pay at least $440 million in rent.

  6. “One of North Texas’ largest commercial property firms is planning to cut jobs almost a year after the start of the COVID-19 pandemic. CBRE — the country’s biggest commercial real estate company, which recently shifted its headquarters from California to Dallas — notified the state that it plans to lay off 193 Dallas-area employees starting in April.”

    An estimated $50 billion in damage caused by the “unforeseen” winter storm and power outages is only going to add to the carnage.

    1. “An estimated $50 billion in damage…”

      I’m sure Berkshire-Hathaway re-insurance group is already looking for a public scapegoat.

  7. Fed covering their tracks — in a report to Congress. Business leverage (gambling?) at all time high, risk of insolvencies (even after massive CARE loans and Fed liquidity). Wow!

    At this point – do govt entities kick the can down the road for another decade (like Japan) to avoid major pain.

    —-

    (Bloomberg) — The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

    “Business leverage now stands near historical highs,” the central bank said in its semi-annual Monetary Policy Report to Congress. “Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

    In the report, the Fed voiced hopes of an end to the pandemic later this year though it cautioned that pitfalls remained.

    In particular, it said that commercial real estate prices “appear susceptible to sharp declines” from historically high levels. That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said.

    Commercial real estate might be hit by a double-whammy after the pandemic, some economists say. An increase in people working from home could result in less demand for office space, while stepped-up online purchases could force more shutdowns of brick-and-mortar retailers and additional vacancies at shopping centers.

      1. Woman standing on Southern Blvd. bridge going over the Intracoastal Waterway to Palm Beach on Friday was holding up a sign that said…

        TRUMP WON

  8. Are inflation worries making you rethink your stock HODLings?

    Word to the wise: If bond yields increase, they tempt the big boyz to reallocate from stocks to bonds. Such large scale reallocation can result in a massive cratering of stock prices. It happened in March 2020.

    Beware the ides of March, HODLers!

    1. Markets
      Rise in Treasury yields prompts speculation of a ‘tantrum’ for markets
      Published Fri, Feb 19 2021 8:17 AM EST
      Elliot Smith
      CNBC
      Key Points
      – The “taper tantrum” in 2013 was a sudden spike in Treasury yields due to market panic after the Federal Reserve announced that it would begin tapering its quantitative easing program.
      – Major central banks around the world have cut interest rates to historic lows and launched unprecedented quantities of asset purchases in a bid to shore up the economy throughout the pandemic.
      – However, the recent rise in yields suggests that some investors are starting to anticipate a tightening of policy sooner than anticipated to accommodate a potential rise in inflation.

      1. There’s some major confusion about the Fed’s role in rising interest rates. Once the markets get a whiff of inflation, the Fed is pretty much powerless to stop the ensuing market dynamics. If they don’t tighten, long-term bond yields will rise, as they did last week, tempting whale-sized investors to reallocate away from stocks. If the Fed does tighten, the resulting higher interest rates have a similar effect, but more at the short term end of the yield curve.

        Either way, the flow of money into stocks slows as more gets diverted to bonds. The resulting decrease in demand for stocks translates into ripe conditions for a selloff.

    2. The Financial Times
      Markets Briefing US equities
      US stocks slip as government bond sell-off leaves traders uneasy
      Main equity indices notch first three-day losing streak of 2021
      Federal Reserve building in 2018
      Federal Reserve meeting minutes show that most of its policymakers believe the continued weakness of the coronavirus-scarred economy means inflation risks are ‘weighted to the downside’
      © Reuters
      Colby Smith in New York and Naomi Rovnick in London
      February 18 2021

      A sell-off in US government debt sparked by expectations that Joe Biden’s $1.9tn stimulus push will stoke higher levels of inflation rippled across Wall Street on Thursday.

      US stocks notched their first three-day losing streak this year, with the blue-chip S&P 500 index closing lower by 0.4 per cent. The technology-focused Nasdaq Composite had larger losses, slipping 0.7 per cent. Thursday’s declines were broad, with energy, technology and industrial companies leading the way lower.

      The falls came as the yield on 10-year Treasury notes traded as high as 1.318 per cent, near the one-year high reached in the previous trading session. Yields have jumped about 0.4 percentage points this year as investors have upgraded their outlooks for US economic growth and inflation.

      “The run-up in Treasury yields is now a headwind for stock markets,” said Sophie Chardon, cross-asset strategist at Swiss bank Lombard Odier. “You can see it is already dampening momentum.”

      Government debt has sold off in recent weeks after Biden’s proposed $1.9tn spending plan triggered fears of consumer prices rising more rapidly after years of relatively lacklustre inflation. Inflation makes bonds less attractive by eroding the value of their fixed interest payments.

      1. The Financial Times
        FTfm Asset allocation
        Asset managers rush to shore up portfolios against inflation
        Investors are asking tough questions of money managers as concerns rise that stock market could suffer
        Investors have taken note of the Federal Reserve’s guidance and priced in both higher inflation and a robust rebound in economic activity later this year © Kevin Lamarque/Reuters
        Chris Flood 11 hours ago

        Signs that inflation is making a comeback are unsettling big investors.

        Past periods of high inflation have weighed heavily on real returns from stocks and bonds, which have flourished over the past decade when inflationary pressures have generally remained muted.

        But inflation forecasts are now rising following massive increases in government spending and the torrent of liquidity unleashed by central banks in response to the coronavirus pandemic.

        Asset managers are now facing a barrage of questions from clients over the risks of inflation and are rushing to shore up portfolios from inflationary risks, fearing that a resurgence threatens to spoil the party again for investors.

        “Inflation is an escalating concern among institutional investors,” said Michael John Lytle, chief executive of Tabula, a London-based ETF provider.

  9. Bloomberg Opinion
    Markets
    4 Questions Lawmakers Should Ask About GameStop Drama
    The House Financial Services Committee has a lot of different market angles to explore at a hearing on Thursday.
    By Mohamed A. El-Erian
    February 17, 2021, 5:30 AM PST
    Digging deeper.
    Photographer: Tiffany Hagler-Geard/Bloomberg
    Mohamed A. El-Erian is a Bloomberg Opinion columnist. He is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE, the parent company of Pimco where he served as CEO and co-CIO; and chair of Gramercy Fund Management. His books include “The Only Game in Town” and “When Markets Collide.”

    A hearing on Thursday by the House Financial Services Committee promises to provide insights into what happened last month — as well as what could have happened — during what many labeled the retail investor uprising. While it is likely to produce many headlines, it is unlikely to arm regulators with clear guidance given the complex competing issues in play.

    I can think of at least four reasons for lawmakers (and regulators) to be interested in an episode that captured attention well beyond financial markets:

    Are small investors inadequately protected?

    The drastic round-trip in the price of GameStop Corp. and a handful of other stocks involved in the uprising is likely to have imposed significant losses on small investors, especially those who entered the trade late. Easy and engaging access to trading, including on margin — the Robinhood effect — were important in enabling considerable involvement by small investors, as was the availability of higher cash savings and, for some, the stimulus checks. The subsequent decision by Robinhood to restrict these investors from buying more of their favored stocks acted as a catalyst for the sharp turnaround of the stocks’ price trajectory, making even more vivid a whole host of questions about investment suitability and the associated vulnerability of small investors to sudden changes in operating rules.

    How close did the Reddit interactions get to the risk of inappropriate market manipulation?

    Interactions on Reddit popularized trades that attracted significant participation by small investors. Some appear to have also encouraged, if not implored, them to act in a certain way. Indeed, a few of those involved felt that Reddit itself was hijacked in the late stages of the uprising by outsiders to divert purchase flows to silver, a decoy “target.” All this points to the risk of inappropriate market manipulation in an area that, until now, does not appear to have been on regulators’ radar screen, let alone be supervised closely.

    Does the host of interactions between broker-dealers and hedge funds increase the risk of collusion?

    While Robinhood positioned itself as the friend of small investors, the uprising exposed their close interactions with hedge funds. These raise a number of questions, particularly when it comes to payments for order flow that some argue could provide an unfair edge to participants as well as the alignment of financial incentives that can increase the risk of collusion.

    How close did we get to a market accident?

    Robinhood’s urgent mobilization of more than $3 billion in funding was essential to keep the company operational. Had such funding failed to materialize, Robinhood’s account base would have faced considerable instability with likely spillovers to the exchanges, which would have likely come under pressure. Also at risk were the credit lines extended by banks and others to Robinhood.

    There is also the fact that the uprising, as small as it was, contributed initially to wiping out quickly more than 5% of the value of the S&P 500 Index. That, in itself, highlights the risk of broad market contagion associated with the sudden de-grossing of balance sheets that have ballooned thanks to minimal borrowing costs and ample liquidity.

    1. Just wait until Bitcoin craters from its $50,000 perch. It will make the GameStonk collapse seem like a walk in the park interrupted by rain drops.

        1. Meet a representative of the future sad panda brigade when interest rates rise off multicentury lows and interest bearing investments and physical gold begin to look attractive compared to the Emperor’s New Cryptocurrencies at mind blowing valuations.

          Notice Mr. Barowner is willing to entertain a 60% discount to his asking price (10 Bitcoin might be enough if you don’t have 25). Seriously?

          Two NYC bars are for sale — asking price is 25 bitcoin
          Alexis Christoforous
          Sat, February 20, 2021, 6:08 AM·3 min read

          A long-time restaurant owner in New York City is looking to sell his two bars for bitcoin. Patrick Hughes put his side-by-side bars in Manhattan’s Hell’s Kitchen neighborhood, Scruffy Duffy’s and Hellcat Annie’s, up for sale in January.

          The asking price? Twenty-five bitcoin (BTC-USD), or about $1.4 million at the current price. He’ll also accept 800 ethereum (ETH-USD) tokens, which values the bars at nearly $1.6 million.

          “I guess my point was that it was something new to attract a different type of buyer, get a little publicity, try to legitimize the currency a little bit,” Hughes told Yahoo Finance Live. Hughes said he would accept U.S. dollars for the bars — he just prefers bitcoin.

          Bitcoin has been on a meteoric rise. It’s up 60% in the month of February alone, reaching an all-time high above $55,000 — giving the cryptocurrency a market value of more than $1 trillion. Citigroup predicts it could hit $318,000 by the end of 2021 Bitcoin got a big boost after Tesla disclosed it invested $1.5 billion in the cryptocurrency, which is also attracting interest from financial institutions. Morgan Stanley has said its investment fund is looking at a large purchase of bitcoins.

          “I might have to cut the price a little bit,” Hughes joked. “So maybe instead of 25 bitcoins, perhaps 10 bitcoins? I don’t know, we’ll see.”

          Hughes said he hasn’t received any bitcoin offers yet for his bars, but he admits he’s gotten a lot of publicity, which he claims could be one of the reasons why the price is going up. “Perhaps I helped drive the price of this bitcoin,” he said. “When I first put this [idea] out there in early January, the price of a bitcoin was $30,000.”

          In case you were wondering, Hughes is a cryptocurrency investor. He bought bitcoin early on and sold all of his holdings when it hit $51,000 earlier this month and then immediately bought the competing cryptocurrency, ethereum.

          “It’s all going to be cryptocurrency eventually and I don’t want to be holding U.S. dollars in a few years when inflation rears its ugly head again. Because it’s coming,” said Hughes.

          Hellcat Annie’s is one of two Manhattan bars that restaurant owner Patrick Hughes is trying to sell for bitcoin.

          Before the pandemic, his bars had a combined staff of 50 people. That’s now down to seven. While Scruffy Duffy’s remains closed since March because of bar seating restrictions due to COVID-19, Hellcat Annie’s reopened in November with outdoor dining.

          “We’re almost back to pre-pandemic levels with the outdoor,” said Hughes. “And now with the 25% capacity indoor, I’ll be able to keep that place afloat.”

          Hughes said after 30 years in the restaurant industry he’s “exhausted” and that it’s time to move on.

          If he successfully sells his bars for bitcoin, Hughes could make history as the first known cryptocurrency restaurant sale in the U.S.

          “I’d like to leave this business at the top of my game and to make a big splash, make a little history, and just go out on top. So I’d like to sell it for Bitcoin,” he said. “I think it would be awesome.”

  10. Mr. Market and the new White House administration should adopt the phrase:

    “I’m good enough, I’m smart enough, and doggone it, people like me.”

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