Kyle Bass invests in Texas, Florida and Tennessee, he said in a statement. recent interview with the Investor Podcast Network.
These states stand to benefit from migration to lower-cost states, a trend that is already occurring.
Bass buys rural land to capitalize on demand for environmental credits.
Billionaire investor Kyle Bass is snapping up land in Florida, Tennessee and Texas, touting those states’ growth potential as workers and businesses shift to more affordable markets.
“When you think about the United States, you see that the coastal region, the West Coast and the Northeast are very expensive, very tax – one might say poorly managed – jurisdictions,” he said in a statement. recent interview with the Investor Podcast Network. “They are looking to business-friendly, lower-cost, lower-tax, or no-tax jurisdictions.”
Bass’s success in real estate is well established. His winning bet against the 2008 housing market was immortalized in the classic book “The Big Short.” And its focus on real estate in lower-cost states is a strategy it has pursued for years now, offering a similar explanation in 2022.
Between then and last year, Florida’s population jumped by more than 365,000, while Texas’s grew by more than 473,000, census data watch. Tennessee’s population increased by 77,513.
At the same time, the exodus of big companies from states like California and New York has weighed heavily on those markets, with $1 trillion in assets disappearing over the past three years. Bloomberg find.
“You have to move real businesses to where they are affordable, where there is expansive activity, where there are natural resources to accommodate that movement, so I want to buy real estate in anticipation of that movement macro,” said the founder of Hayman Capital.
But Bass’s focus on land doesn’t stop there. By expanding its holdings, it also seeks to capitalize on environmental mitigation, a market that sells credit to companies that want to offset the ecological impact of their operations.
To that end, Bass created Conservation Equity Management in 2021, a private equity firm that sells federal credits in exchange for services such as wetland repairs on owned properties.
“As more businesses and people locate in Texas and other business-friendly, low-tax states, the environmental consequences will be devastating, forcing businesses to consider their physical environmental impacts , their carbon footprint and mitigation options,” he said. said in 2022.
By September of that year, the company had acquired properties worth $90 million in Texas alone, Bloomberg reported. At that time, the price per acre of rural land had appreciated 123% over the decadethe point of sale cited.
But price appreciation isn’t the only reason Bass is buying so much land. He also touted real estate investments as an important hedge against macroeconomic uncertainties. He had previously noted a preference for land rather than gold as a safe haven.
“When I think about gold versus rural land again, I have the demographics in my tailwind,” he said in 2022. “I also have something I can drive towards. “
As for future risks, Bass’ main concern is China. He says economic crisis in the country, as well as the threat of geopolitical fallout with the United States, leaves little room for a positive market attitude.
This story was originally published in March 2024.
Read the original article on Business Insider
