“Bubble watch”Digs into trends that may indicate upcoming economic and / or real estate problems.
Buzz: The country’s richest landowners may have dodged a pandemic bullet, but they collectively look relatively poor compared to, say, a Silicon Valley icon.
Source: Reviewing my trusty Forbes annual ranking of the world’s billionaires spreadsheet.
If you were looking to burst a commercial real estate bubble, first think about the wealth of the 20 richest real estate moguls in the country – a list that includes six Californians: Donald Bren, John Sobrato, Edward Roski, Jr., Rick Caruso, Donald Sterling and Jay Paul. Together they are worth $ 97 billion. If you think that’s a lot of money, well, it’s not in rich math these days.
A hot stock market, especially for technology investments, means those 20 fortunes combined only match Facebook founder Mark Zuckerberg for the fifth largest individual fortune in the world, according to the Forbes tally. Yes, attached!
Commercial real estate – where most of the real estate wealth is located – appears to have averted a major pandemic.
Various government aids, cheap finance, and a little patience have given smart homeowners enough flexibility to exit the coronavirus economy with just a few bruises.
Look at these 20 real estate moguls as a sort of clue to commercial properties. Their strengths include everything from office parks to iconic skyscrapers; apartments for the working class and the rich; and shopping centers ranging from shopping malls to iconic shopping centers.
The combined net worth of the 20 tycoons of $ 97 billion is actually up $ 13 billion, or 16%, since the spring of 2020, when coronavirus lockdowns slowed the economy.
It’s an impressive performance if you think back to when the pandemic was first brewing and remember that most landlords and landlords feared the worst – everything from housing fill issues and perception. from rents to meltdowns in financial markets and loans.
These concerns were why the total real estate fortunes of the top 20 were reduced to $ 84 billion from $ 100 billion – a 15% drop – in the year that ended in the spring. 2020.
That leaves a $ 97 billion question: who is too rich?
Yes, Zuckerberg’s wealth – tied to the market value of his business – was in a similar situation a year ago. Since equity investors had no experience with the pandemic, “selling” was the knee-jerk reaction of most traders.
Much like the real estate crowd, Zuckerberg’s wealth has plummeted: a drop of $ 7 billion – or 12% – in the year ending at the start of the pandemic era.
But stocks, especially those in tech niches, didn’t stay down for long.
Over the past year, Facebook CEO’s wealth has grown 77% – that’s $ 42 billion if you count – to tie in the value of the 20 collective wealth of the real estate tycoons.
This surge in stocks placed Zuckerberg in fifth place among the richest in the world behind Amazon’s Jeff Bezos ($ 177 billion); Tesla’s Elon Musk ($ 151 billion); Bernard Arnault of LVMH retail wealth in France ($ 150 billion); and Microsoft co-founder Bill Gates ($ 124 billion).
On a scale of zero bubble (no bubble here) to five bubbles (five alarm alert) … TWO BUBBLES for commercial real estate and FIVE BUBBLES for technology stocks.
Think about the reach of those seemingly extravagant tech stock market bonuses for, say, the biggest individual fortune in American real estate.
Donald Bren, the 88-year-old owner of real estate giant Irvine Co., is again ranked by Forbes as the richest individual real estate owner in the country. Newport Beach-based Bren’s $ 15.3 billion empire was ranked as the sixth largest real estate fortune in the world and was No.132 on Forbes’ list of global billionaires. That is 127 places behind Zuckerberg.
But that was a two-year stagnation for Bren, according to Forbes’ calculations. His net worth has fallen 1% in the past year after dropping 5% in the previous 12 months.
Zuckerberg? In the last year alone, the stock market has essentially added nearly three fortunes of Bren’s size to his net worth.Jonathan Lansner is an economics columnist for the Southern California News Group. He can be contacted at [email protected]