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Billionaire investor Kyle Bass has been buying up land in Florida, Tennessee and Texas, touting those states’ upward trending potential as workers and businesses both move to more affordable markets.
“When you think about the United States, you can say the coasts, the West Coast, the Northeast are very high costs, very high taxes, very poorly managed areas,” he said. Recent Interviews on the Investors Podcast Network. “They’re moving to jurisdictions that are more business-friendly, lower costs, lower taxes or no taxes.”
Bass has a proven track record in real estate — his winning bet on the 2008 housing market was immortalized in the classic “The Big Short” — and focusing on real estate in low-cost states is a strategy he’s pursued for years. Similar explanation 2022.
Since then through last year, Florida’s population has increased by more than 365,000, while Texas’s has increased by more than 473,000. Census Data Tennessee’s population increased by 77,513.
Meanwhile, the exodus of large corporations from states like California and New York has weighed heavily on these markets, with $1 trillion worth of assets leaving over the past three years. Bloomberg found.
“Real businesses need to relocate to places where they can affordably afford it, where there’s activity and the natural resources to support that movement, so I want to buy real estate that’s on the other side of that macro movement,” the Hayman Capital founder said.
But Bass’s land interests don’t end there: By expanding his land holdings, he also hopes to benefit from the market for environmental mitigation, or the selling of credits to companies that want to offset the environmental impacts of their operations.
To that end, Bass in 2021 founded Conservation Equity Management, a private equity firm that sells federal credits in exchange for services such as wetland restoration on properties.
“As more businesses and people move to Texas and other business-friendly, low-tax states, there will be devastating environmental impacts, forcing businesses to consider their physical environmental impacts, carbon footprints and mitigation measures,” he said. Said 2022.
By September of that year, the company had acquired $90 million worth of property in Texas alone, according to Bloomberg. By that time, the price per acre of rural land had risen. 123% in 10 yearsThe media reported.
But rising prices aren’t Bass’ only reason for buying so much land. He also stressed that real estate investing is an important hedge against macroeconomic uncertainty. He has previously said he prefers land over gold as a safe-haven asset.
“When you think again about gold and rural land, demographics are driving it,” he said in 2022. “Some places are within driving distance.”
Looking ahead, Bass’ biggest concern is China, where he says the country’s economic turmoil and the threat of a geopolitical clash with the United States leave little room for market optimism.
This story was originally published in March 2024.
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