I'm The GOAT of Taking Credit

5-7-25

May 07, 2025

Opening Comments

My last note was life and investing advice from the Oracle of Omaha. The most opened links were the Buffett video on the power of long-term investment horizons and the impact of cannabis use on colon cancer survival.

With all the construction in South Florida, the amount of nails and screws you get in your car tires is concerning. I have had a new car for 6 months, and this is the third time I have had to get something removed from my tire. I also had to replace one tire.

Picture of the Day-The Power of Compounding
I’m the GOAT of Taking Credit
Quick Bites
- Markets
- Debt Per Capita
- Estate Tax Update
- The Psychology of Wanting to Leave Early
Tariffs
Politics
Middle East
Other Headlines
Health
Real Estate
- Miami Design District Retail Rents Skyrocket
- Buy vs. Rent in 13 Cities
- More Stupid Rent Regulations in NYC

Picture of the Day-The Power of Compounding

Given Warren Buffett’s recent retirement announcement (short video), I wanted to put something into perspective. Since 1965, Buffett has returned 19.9% on average, or about double the S&P 500 return of 10.1% (reinvesting dividends). To show you the power of compounding, if you invested $10k in 1965 in the S&P 500, you would have $3.9mm as of the end of 2024. If you invested with Buffett, you would have $549.0mm. You heard that right. The power of compounding is real. This link is the Berkshire Hathaway website that outlines returns for the stock and S&P each year. I put these into an Excel spreadsheet and came up with the returns. One more interesting tidbit about Buffett and Berkshire is that one dividend was paid in 1967, and Uncle Warren called the decision to pay it a “bad dream.” This Bloomberg article has good charts outlining Buffett’s investing prowess.

I'm The GOAT of Taking Credit

I have often joked about my ability to take credit for others’ accomplishments, and I am going to do it again. If you recall, I was hired to interview the creator of Billions along with the character “Wags” about 18 months ago. One hour video of the interview can be found here (never shared with RR readers). It was for a real estate deal in NYC for the repositioning of 10 Bryant Park. At the time, the building was in a dire situation. The largest tenant, HSBC, announced they were leaving and vacating approximately 475,000 square feet of a 900,000 square foot building. The Billions event was meant to be a “kickoff” for the plans to renovate the building and get it re-leased. Clearly, I did an AMAZING job and was massively underpaid when you hear what has transpired since.

In recent weeks, it was announced that Amazon, yes, that one, leased 330,000 feet in 10 Bryant Park. I presume Bezos and his team saw the video of my interview with Brian Koppelman and David Constable and, based on that, they decided to lease over 1/3rd of the building. The building is now almost fully leased.

Can I take all the credit? Maybe not all, but at least 90%.

Since the pandemic, there has been a flight to quality for office space in NYC. High-quality, “trophy” office space trades at a premium and is in high demand. Remember, 10 Bryant Park’s previous $855M sale fell through in 2022, and its appraised value sank to ~$650M amid rising rates. Yet the owners hung on and landed a major tenant. Big deals are still happening, suggesting the office market has more life than the doom-and-gloom forecasts.

The turnaround didn’t happen by accident. PBC (the landlord) invested over $50M into renovations and rebranded the former HSBC Tower as “10 Bryant Park.” They transformed an 80s-era building into a modern, cool workplace. New lobby, upgraded tech – all aimed at making this tower a magnet for today’s tenants. It went from dated bank HQ to a shiny, tech-friendly trophy address. For a few years, when I worked in NYC, the HSBC Tower was my office. I love the location and the building even before the upgrades.

The CEO of the US entity that owns the building is a good friend of mine, and he is an impressive business leader. Eli Elefant is a former captain of the Israeli Army and knows his way around all aspects of real estate. He led the team to make the dramatic changes that ultimately led to the major turnaround and the Amazon lease.

Amazon had been playing hard to get in NYC. 10 Bryant Park is reportedly their first big direct lease in the city after backing out of other landlord deals during the past few years, paying large penalties to cancel already negotiated leases. The fact that they finally committed shows how 10 Bryant Park stood out to them. It’s a huge vote of confidence in the building (and the Midtown market). The rent starts at $90 and goes up to $115/ft for the 15 year lease. Eli and his team were able to negotiate zero vacancy in that the Amazon lease started the day after HSBC vacated.

Just last week, Amazon also bought 522 Fifth Avenue right near 10 Bryant Park. The purchase is 600,000 square feet and solidifies Amazon’s presence in the area.

The 40 best buildings in Midtown Manhattan now have a 5.7% availability rate, relative to a 14.5% availability rate in the first quarter of 2022. The market has bounced back with the return to work, and the highest quality buildings are in highest demand. In another example of the Manhattan office market heating up from the Real Deal. “Coming off the strongest first quarter since 2019, tenants inked deals for 3.38 million square feet in April, up 23% year over year, according to a new Colliers report.” A different example, 550 Madison Avenue is now 96% leased after Aquarian Holdings signed a deal for the 75,000 square foot three-level penthouse. Manhattan’s leasing velocity in April of 2025 was +23% relative to last year and absorption stayed positive for the 10th consecutive month with office availability dropping to 15.7%. Sublease availability had been a huge issue and now 68.3% of the space adding during the pandemic has been shed with just 3.6mm square feet available above pre-pandemic levels.

The biggest takeaway is that if you hire me to speak at your conference or event, good things will happen for your firm. The Amazon lease was clearly my doing and not all the hard work of Eli and his team, the stronger market, the return to the office, or the fact that Amazon is building a campus in the Bryant Park area. It’s all me, baby!

Quick Bites

Stocks started off the week slightly lower as Trump had shaky commentary on global trade deals but rebounded on Wednesday on the upcoming US-China trade talks. Fed left rates unchanged. Which was the right call in my old due to tariff uncertainty. “Uncertainty about the economic outlook has increased further,” the statement said.Stocks were mixed, but largely unchanged. A strong 10-year note auction helped move Treasury yields slightly lower to 4.27%. Early in the week, oil prices approached $55/barrel, levels not seen since COVID due to OPECs plan for a surge in production (+411k/barrels/day) . Clearly, this hurts Russia and Iran. In my 2025 predictions note, I suggested $50 oil in 2025.
I preach fiscal responsibility and have been incredibly frustrated by the Federal government running $2 trillion deficits (7% of GDP). It is irresponsible. Check out the Federal debt per capita relative to the Florida debt per capita. DeSantis has paid down 1/3rd of the total debt of Florida during his time in office as governor, while the Federal debt balloons each year. This link shows total liabilities by state; again, Florida is one of the lowest. During his annual meeting Buffett tackled the deficit topic. "I think the problem of how you control revenue and expenses in the government is one that is never fully solved. And I don't think we're immune from it," Buffett said. "We're operating at a fiscal deficit now that is unsustainable over a very long period of time," he continued. "It has the aspect to it that gets uncontrollable at a certain point.

Interesting article on the potential repeal of the US estate tax and how financial advisers of the rich are trying to block it. I want to start with the fact that I believe we are overtaxed when you factor in estate taxes. You pay income taxes on earnings, taxes on investments and dividends, and then when you die, you pay another 40% federal and in NY another 16% estate tax? This does not factor in city and state income taxes, which are yet another burden. I am adamantly opposed to estate taxes. If you worked hard and were able to build up a significant net worth, you could easily be paying over 75% of your earnings in taxes if you live in a high tax state, including estate taxes. The article suggests that the financial advisers do not believe any repeal will be long-term and will give people a false sense of complacency. Due to these idiotic taxes, wealthy people spend billions a year to create trusts to avoid them. One search of the web suggested that the global estate planning service market is expected to reach $8.8bn by 2034. This article suggests that the repeal of estate taxes could trigger substantial litigation.
I like to be at a party on time and don’t love being “fashionably late.” However, I am never the last person to leave. I’m always conscious of using my time well. I like to arrive early to connect with the hosts, and I try not to overstay my welcome. My friends Brad and Lisa sent me an article from Psychology Today: “The Psychology of Wanting to Leave Early,” and it appears it was written about me. The article outlines different reasons for wanting to leave and be efficient with your time. For those who are like me or prefer to be the last to leave, take a quick look at the link. I’ll see you at the next party, but expect me to be first to arrive and not need to be asked to leave.

Tariffs

I spoke with a businessman who’s been importing from China and Southeast Asia for decades. He was in China for the past month and commented that most of the factories were not producing products given the tariff turmoil. He made an interesting comment that I had not thought about previously. Retailers and E-Commerce businesses rely on holiday sales to survive. The tariff uncertainty and absolute levels of tariffs have caused shipments to crash (see charts below). Given lead times needed to manufacture and ship items, orders must be placed to receive them in time for holiday sales. Halloween orders already needed to be placed, and Christmas orders need to be in now given 60-day lead times for production and then shipping and stocking time. You cannot place orders on June 30 and expect to get products on the shelf for the holidays in most cases. As those who import are trying to navigate the tariffs, many have delayed orders, hoping the tariff levels will fall. Thousands of companies will go out of business if they miss the holiday sales. What are the knock-on impacts? Store closures, layoffs, bank losses on loans…Of note, most of the factories in Southeast Asia are at capacity, given the lower tariffs and additional production will be challenging. This story suggests China is withholding economic data given the severe production slowdowns and job cuts. However, this encouraging CNBC story suggests Bessent and Greer are meeting with Chinese counterparts this week in Switzerland to discuss trade and economic issues.

Real Estate

I frequent the Design District in Miami, as there are a bunch of restaurants there. The area has become a retail hotspot, according to this Bloomberg article. The Design District’s retail rents surged 67% to $500 a square foot last year, according to brokerage Cushman & Wakefield. That was the biggest increase among high-end shopping areas in the Americas. The district is now No. 5 on the real estate firm’s ranking of the priciest US retail streets, up from No. 11 the prior year. One of the main owners of the Design District, Craig Robins, began accumulating buildings in the area in the late 1990s. Robins estimates that he paid around $15 million for about half of the Design District. The last notable sale in the area was in 2023, when yoga retailer Alo bought its unit for $22 million, or $4,400 a square foot. Based on the district’s roughly 1 million square feet, that suggests the entire property would have a valuation of around $4 billion, which is “as good an estimate as you’re going to get,” said Jorge Portela, senior director in the Miami office of Jones Lang LaSalle Inc. There are many high end shops and restaurants in the Design District.
In some U.S. cities, it now takes more than twice the income to afford a median-priced home than to afford a median-priced apartment — and the gap keeps growing. Nationwide, a recent Redfin analysis finds that U.S. homebuyers must earn $116,633 to afford such a home — 82% more than the income needed to cover the cost of a median-priced rental. The figures are based on the standard assumption that housing costs shouldn’t exceed 30% of gross income, a common affordability benchmark.

I have been incredibly critical of the NY rent laws from 2019 as well as all the things the state has done to screw over landlords. The unintended consequences of idiotic policies hurt tenants and landlords alike. The latest limits rent increases during a time when landlords face increasing costs. Nothing could get me to buy in NYC to become a landlord right now. How can landlords keep up with inflation and the non-stop requirements from politicians? Look at what the idiot politicians did to the rent stabilized housing market which has seen building values collapse by 50% or more. Banks are taking them over, as landlords cannot keep up with the mortgages and rising expenses, given the inability to raise rents. In some cases, the banks do not want to foreclose given the punitive cost of violations. The politicians have created a mess. Also, more tenants are living in apartments that the landlords refuse to fix because they are not allowed to raise rents. Just bad policy.

© 2025 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #783 ©Copyright 2025 Written By Eric Rosen.

I'm The GOAT of Taking Credit

5-7-25

Picture of the Day-The Power of Compounding

I'm The GOAT of Taking Credit

Quick Bites

Tariffs

Politics

Middle East

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