Deep-pocketed investors like Paulson & Company, Lone Star Funds and the Blackstone Group pumped hundreds of millions of dollars into Puerto Rico real estate in recent years. In hindsight, that doesn’t look like such a great idea.
The island’s economy is in tatters in the wake of Hurricane Maria. Storm damages could add up to $95 billion, according to one estimate.
“We sustained a lot of damage, and we’re facing very significant losses,” Brian Tenenbaum of the Morgan Reed Group, a major office landlord, told the New York Times.
Hedge funder John Paulson, famous for betting against the U.S. housing market in 2007, flew to Puerto Rico on his company’s private jet days after the storm to inspect the damage. Two of the company’s hotels were slightly damaged. A third shut down for now. In a statement the firm said it looks “forward to welcoming guests as early as the winter season.”
CPG Real Estate had to charter a private plane carrying canned goods, diapers and batteries to open part of an outdoor shopping mall in San Juan.
Some investors see light at the end of the tunnel: federal funding. “I think a lot of money will be spent fixing Puerto Rico, and that should be better for everyone,” Marc Lasry, of Hedge Fund Avenue Capital Group, told the Times. [NYT] — Konrad Putzier