The future is non-fungible, that much is certain.
“Cash, credit or crypto” has long since entered common parlance. The barrier between “IRL” and “URL” is wearing thinner by the moment. As the blockchain grows, so does real estate’s imagination for what can be made of this strange new economy. From Nicaragua to the Hamptons to the depths of the metaverse, expansion is the agenda.
Quixotic ambition drives real estate’s greatest success stories, as well as its most infamous cautionary tales. This month, we bring you a thrilling and sobering mix of both.
Our cover story explores the emergent cryptocracy, a new class of billionaires that are trading lines of code on a screen for luxury homes on the beach. They represent only a small slice of the luxury market, but they’re the most visible buyers to “mere mortals.”
The nouveau crypto-riche are spending their digital money in what UCLA real estate professor Eric Sussman says are “predictable” ways. Flash cash flow begets flashy purchases. If you’ve got it, flaunt it, right? And when “it” is Bitcoin, who knows how much longer you’ll still have it.
Supermodel Linda Evangelista once declared that she wouldn’t get out of bed for less than $10,000. Add three more zeros and you have the bare minimum listing price to even be considered by the Vichinsky brothers of the Hamptons.
Zach and Cody Vichinsky started in a rented farmhouse, raising data where there would be dairy cows. The founders of “mega-broker” Bespoke Real Estate are capitalizing on the arbitrary nature of pricing by setting sky-high asks. They’ve deployed the strategy in Long Island’s East End, a “land of milk and honey” where, Zach once told his brother, even the laziest broker can strike it rich.
In the land of rainforests and volcanoes, the picture wasn’t quite as rosy. A resort on the coast of Nicaragua caught the eye of Miami developers Ophir Sternberg and Ricardo Dunin. The two decided it would become a mecca for ecotourism. Four years and millions of American dollars later, Sternberg decided the venture just wasn’t for him and abandoned it for something bigger — any guesses as to what?
I’ll give you a hint: For a little over a year, SPACs have reigned. Money for nothing, checks for free; what could possibly go wrong? Evidently, quite a lot. What started as a shortcut for young, promising companies to go public ran its course. Between sky-high valuations and skeptical investors, SPACs have shown us what happens when you over-promise: you under-deliver.
We’d be remiss to overlook the real estate players who have delivered, though. This month’s Closing interview is with affordable housing magnate Rafael Cestero. His ideals are incorruptible and his commitment to social justice has been baked into his career trajectory from the start.
That said, he does have some controversial views on bagels.