Anthony Scaramucci Real-Estate-Capital_R01

Anthony Scaramucci (0:00 - 0:39)

And so I had the worst year of my career in 10 trading days. So there were 10 trading days in the month of March, 2020, where I think we dropped 25% and that really hurt our business. We had redemptions.

We had people saying, okay, they've lost their touch. And there's an expression on Wall Street, which I'll share with you. Everybody's a long-term investor, Nancy, until they have short-term losses. Okay. The minute they have short-term losses, they set their hair on fire. They run around like crazy.

And so we made a decision, which turned out to be one of the better decisions, actually. We pivoted the business into digital assets.

Nancy Lashine (0:41 - 2:28)

Hello, and thanks for tuning in to Real Estate Capital. I'm your host, Nancy Lashine of Park Madison Partners. Capital is the lifeblood of the real estate industry, but the decisions on where and how it's allocated are driven by people and personalities.

Who are they? What motivates them? What can we learn from their experiences?

On this show, we introduce you to some of the real estate industry's most influential thought leaders and decision makers, and we talk about what is important to them, how they make critical decisions, who has influenced them, and a lot more. My guest today is Anthony Scaramucci, founder and managing partner of Skybridge, a global alternative investment firm, and founder and chairman of SALT, a global thought leadership forum. Anthony started his career in Goldman Sachs' real estate department, went on to co-found Oscar Capital Management, which he sold to Neuberger Berman, and then launched Skybridge in 2005.

He built it into a scaled fund-to-funds platform, in part by acquiring Citibank's fund-to-funds business during the financial crisis. More recently, he's become one of the more prominent voices on Wall Street around digital assets and macro risk. In this conversation, Anthony and I talk about resilience, what it looks like when you've been knocked down publicly and repeatedly, and how you get back up.

We get into his views on the current macro environment, including tariffs, interest rates, and the risk of stagflation, and what all of that means for real estate, and we discuss why he pivoted Skybridge into Bitcoin, what tokenization could mean for real estate transactions, and his contrarian case that interest rates may ultimately head much lower than people expect, thanks to AI-driven productivity.

Hey, Anthony, thanks so much for saying yes. I really appreciate it.

Anthony Scaramucci (2:28 - 2:31)

It's an honor to be on with you, Nancy. How are you?

Nancy Lashine (2:32 - 3:11)

The real estate market's challenging, but we live every day to fight again, and it's actually, it's better than last year, so that's a good thing. There's so many things I want to talk to you about, and we'll, particularly, we'll talk about resilience, and we'll talk about a lot of things. Let's, can we start though?

You're a Port Washington kid, and I just love that. I've lived in Port Washington for my whole adult life, last 40 years. You've probably lived there almost as long, or nearby, so there's, you have a great story about, sort of, your beginnings there, coming out of Port Washington High School, and the guidance counselor showing up at your house, and talking to your folks about sending you to college, and maybe you can just share that with everybody.

Anthony Scaramucci (3:11 - 4:15)

Okay, so you're from Port Washington, and just a reminder to everybody listening in, so all Long Island really is, and we all learned about this in the fourth and fifth grade, in our public schools, is Long Island is a glacial deposit, and so the glacier came down, it mowed down the Catskills and the Adirondikes, which were apparently a lot taller than they are now, and then when the melt happened, and the glacier receded, it left Long Island, the Two Forks, Lock Island, it left the elbow of Cape Cod, Nantucket, Martha's Vineyard, et cetera, and so these are the largest sand deposits, largest granulated sand deposits in North America, and the peninsula of Port Washington, interestingly enough, was the largest sand deposit on Long Island, and a lot of people, my family was a bunch of coal miners, so my dad came out of Northeastern Pennsylvania with his two brothers, and responded to an ad to mine sand out on Long Island, which was outdoors, Nancy, wasn't going down into the mines like my grandfather did. 

Nancy Lashine (4:16 - 4:17)

Sounds a little safer. 

Anthony Scaramucci (4:18 - 8:44)

And so my other side of the family, the DeFeos, you may remember Ghost Motorcycle, my uncle had the motorcycle in the town for over 50 years, he passed away a few years ago, so my father gets to Long Island, he starts out as a laborer on the docks, where they're taking the sand by conveyor belt, they're putting them on these large barges, and they're shipping them to Long Island City.

From 1905 to 2000, 65% of the concrete that was mixed into cement, making the skyscrapers of New York, came from my hometown, came from the sand mixture from my hometown, and so for 41 years, my father worked there, started as a laborer, ended up as a crane operator, was in the union, hourly worker, had a great job though, I lived on Webster Avenue, so if the area, it's right behind the Main Street School, which was my elementary school, is now the landmark there, and my father bought that house for $16,000 in 1962, and we had a good middle class, comfortable suburban lifestyle as a result of his very hard work, I would never tell anybody I grew up poor, did not grow up poor, were we budgetarily constrained, like most middle class families, yes, and were they clueless on education? They most certainly were, they were completely clueless on education, so what do I mean by that?

My father worked as a laborer, my mother was a makeup artist, they wanted us to go to college, but they didn't even know what college or what all of that meant, and so I had very high SAT test scores and good grades, and I had gotten, and you probably would remember this, we only applied to three schools, we applied to a beach school, a safety school, or middle school, and then a real safety, and so I got into three schools, I got into Tufts, Dickinson College in Carlisle, Pennsylvania, and Binghamton, and I actually applied to four schools, the one I didn't get into was University of Pennsylvania, which is fine, and then John Zanetti, Italian American, guidance counselor, came to see my parents, spoke fluent Italian, and he was sitting at the kitchen table with this little tiny, we had this hallway kitchen in our house, there was a little tiny table adjacent to it, and that's where we had all of our meals, by the way, and my mother was pouring out of a cast-iron espresso pot, she was pouring what looked like motor oil, which was actually espresso, and they were smoking, Zanetti was smoking a cigarillo, my father and mother were smoking Marlboros, because this is when he set the scene, Nancy, these are old-school people, they're drinking espresso at 8 o'clock at night, and smoking, of course they go on to live to 88, and my mother's almost 90, God bless, yeah, old-school people, and Zanetti says, send them to Tufts, my father thinks it's spelled T-O-U-G-H-S, he has no clue, and there was a big price difference, it was $4,000 to go to Binghamton, $24,000 to go to Tufts, but my father listened to John Zanetti, and about three weeks later, four weeks later, my dad gave me a check, and it was for $10,000, and I said, pops, where did you get this from? He said, I cashed my union life insurance policy, this is the cash value of my life insurance policy, and I'm giving it to you to help you get started with your college career, and that was a big moment for me, because I was a young kid, I was a wayward kid, Nancy, I was an Italian guido out cruising in my Camaro, I was wearing the gold chains, I had the power booster, I was trying to date all the girls, okay, and I wasn't as focused as I needed to be, when he handed me that check, I was like, okay, this means so much to my parents, this means so much to my family, that I got to start paying attention, and when I went to Tufts, I accelerated there, I got myself into Harvard Law School, and when I say I got myself, I had lots of help, you don't get anywhere in this life without help, I mean it that way, but I ended up going to Harvard Law School, and I go back to John Zanetti, I'm not saying I wouldn't have done well if I had gone to Binghamton, but Tufts was down the block from Harvard, and my faculty advisor at Tufts was very close to the guys at the school, and I think that was instrumental in me getting into that school, by the way, and I feel forever grateful to those people.

Nancy Lashine (8:44 - 9:00)

But it's such a great lesson as you get to a certain stage in your life where you have influence over people, whether you're a guidance counselor or you're running a big company, to just find the people where you can really make a difference in their lives, this guy made a huge difference in your life, it's a great, I love that story.

Anthony Scaramucci (9:00 - 9:22)

And by the way, so I've told that story on a few podcasts, and people have reached out to me, okay, so I've gotten, this one gentleman who was an executive at an aerospace company, he's out in California, he says, Anthony, I listened to your podcast, I have a John Zanetti story, and he proceeded to tell me that John Zanetti went through his house and told his parents, this is what you need to do. 

Nancy Lashine (9:23 - 9:24)

Oh, the same, the same person. 

Anthony Scaramucci (9:25 - 9:42)

Same sort of story, and this is a really good public teacher's story too, okay, because you're making a very big impact on a lot of people's lives, and somebody like John who really cared.

Right, well I guess it really hit home,

Nancy Lashine (9:42 - 10:31)

It hit home for me, because my grandparents were immigrants, nobody had ever gone to college, my mother, first person in the family to go to, not just to college, but then she ended up getting a master's degree at NYU, and she was a guidance counselor, a college advisor, down at Seward Park High School, and she took these kids who, again, were in a similar situation, and she was my size, and she would come home at dinner and tell these stories about somebody walked in, and he was way bigger, and it was a tough school, and there were drugs and weapons and all that, but she would just take a handful of kids every year, and they would become her, her charges, and we started a little scholarship in her honor at Hunter College, where she went after she passed, but anyway, it's, those are good things to remember. Okay, I'm gonna fast forward, because we have so much to talk about.

Anthony Scaramucci (10:31 - 11:04)

Yeah, I think that the lesson of your story and my story is you need people to help you, and also if you are starting from the bottom, you're gonna go through these tribulations of discomfort, and you're gonna go through this need to find your way, and it's okay to be embarrassed once in a while. I was wearing 100% polyester at my first Goldman Sachs job interview. The partner looked at me, said, hey, you're a smart kid, but you look like an Italian undertaker from Brooklyn.

You gotta go buy a real... 

Nancy Lashine (11:04 - 11:05)

God bless! Good for him for saying that.

Anthony Scaramucci (11:06 - 11:22)

But I was embarrassed, and he said, you got to go buy a natural fiber suit, and you got to buy a cotton shirt before I invite you down to Goldman. And I tell that story, too, because, hey, listen, you got to go through your rite of passage, and you don't have to be embarrassed about it. It's okay.

I think those are the big messages.

Nancy Lashine (11:22 - 11:28)

Yeah, and then you have a great message about resilience, because you don't necessarily succeed the first time.

Anthony Scaramucci  (11:28 - 11:33)

I'm a case study in failing upward, Nancy. I know how to fail upward.

Nancy Lashine (11:34 - 12:07)

You have a lot to teach a lot of us about that, and just about being honest. I'm You spent time at Goldman Sachs. You got fired once.

You got rehired. You started your own business, and then sold that business to Neuberger, ultimately started a second business, Skybridge. So I would just fast-forward a big part of your history, but you started this fund of funds.

How did you build a fund of funds of scale? How did you... How did that happen, and then what did it teach you about managing your action?

Anthony Scaramucci (12:07 - 13:34)

You got to have friends. Michael Dell was the first money in. My quick story, so I go to Harvard Law School, Goldman, got fired at Goldman, but then got rehired into Goldman, then left Goldman in 96, started a business, sold it to Neuberger Berman.

Neuberger got bought by Lehman Brothers, and so when that happened, I went to Dick Fould and said, listen, I want to start another company. So I had my own capital. I had Michael Dell's capital.

I had Dick Fould's capital. I had some balance sheet capital from Merrill Lynch, who was my M&A banker at the time, and so that's back in 2005. I start the business, running the business.

When you say scale, it was only $300 million when I got it started, but when the 2008 financial crisis happened, this is the law of unintended consequences. Again, if you'd said to me, Lehman's going out of business, Nancy, but SkyBridge is still going to be here 20 years later, I would have not bet that, but that financial crisis created an opportunity for us where we bought Citibank's fund-to-funds business. So we were growing, but we were impaired by the 2008 crisis, and then we were able to buy Citibank's fund-to-funds business and merge it into SkyBridge, and that really got us to scale.

So some of it was organic, and some of it was entrepreneurial, and some of it was taking advantage of the global financial crisis.

Nancy Lashine (13:34 - 13:43)

Were you the snake swallowing the elephant, though? You were like in the billion-dollar range, and you bought a four or five billion dollar AUM business.

Anthony Scaramucci (13:44 - 16:52)

Yes, I think we were the snake swallowing the elephant, but here's what I had to do. I went to James Packer, who people in the country probably don't know, but James Packer is a very high-profile Australian billionaire. I had a relationship with somebody from Goldman Sachs that knew him very well.

He had a company called Challenger Financial Services, based in Sydney, that was trying to grow in the U.S., and so I flew to Sydney, and I made a presentation to these guys to buy 10% of SkyBridge to help me be the, what did you say, the snake swallowing the elephant. So I had a billionaire's help from Australia to buy the elephant, even though I was a tiny snake, and that made all the difference in the world. So again, lessons in creativity, lessons in resilience.

The financial crisis should have knocked us out of business. We flipped it into an opportunity for ourselves, and we were able to get the business scaled. But then we also, listen, let me tell you, you have setbacks in business no matter what.

Even when things are going well, there are certain things that are not going well. We did quite well from 2010 to 2020, and then in March of 2020, I got COVID wrong, and I was at an event at the World Economic Forum, and this is a funny story, but I think you'll appreciate this. There were three very high-profile hedge fund managers with me.

We're in Davos, Switzerland, World Economic Forum. We're meeting with two World Health Organization bureaucrats, and I walked out of there saying that COVID was going to be like SARS or like MERS. It was going to affect Asia, and it was not going to expand.

We weren't going to have this 4 billion person lockdown and this several trillion dollars of consequential damage, health and otherwise. I got that so wrong. And I had the worst year of my career in 10 trading days.

There were 10 trading days in the month of March 2020 where I think we dropped 25%, and that really hurt our business. We had redemptions. We had people saying, okay, they've lost their touch.

There's an expression on Wall Street which I'll share with you. Everybody's a long-term investor, Nancy, until they have short-term losses. The minute they have short-term losses, they set their hair on fire.

They run around like crazy. And so we made a decision, which turned out to be one of the better decisions, actually. We pivoted the business into digital assets, and we started buying Bitcoin at 15,000, 16,000.

It's been on a rocket ride. It's been down recently, but still 16,000 to 67,000 has been a transformational thing for our business. And so I guess what I'm saying to you is when you're an entrepreneur, you have to expect anything.

And you also have to recognize some of your decisions are going to be good, some of your decisions are going to be bad, and you're going to need some luck, and you're going to need some help from your friends to move things around.

Nancy Lashine (16:52 - 17:04)

Yeah. Yeah. I'd love to talk about your views about digital assets, but before we jump away from the initial days of SkyBridge, you were basically selecting managers in this fund of funds.

Anthony Scaramucci (17:04 - 17:10)

We still do that, yeah. We've got almost two billion dollars in that product, and we still do that.

Nancy Lashine  (17:10 - 17:18)

And what have you learned in the last 25 years about due diligence and manager selection that you'd like to share?

Anthony Scaramucci (17:20 - 20:06)

I'm mostly with larger managers now. In the beginning, I was with smaller managers, and I would say the presumption for me, I was a very cautious person, so I would say that every manager was presumed guilty and poor at their jobs until we could prove them innocent, right? And so we did tremendous amounts of background work, and we did background checks, and lots of cross-referencing of their career tracks, and verifying their college educations or their MBAs.

I feel if you're lying in one of those areas, if you tell the small lie like that, you're going to tell a very big lie, and you're going to hurt your clients someday. So we did all of that. I interviewed at the 92nd Street Y a young man by the name of Tom Harden, and he was somebody that caught insider trading in 2007, and he wore a wire for the FBI.

And so I interviewed him the other night, and one of the things he said to me was he was working at a hedge fund where he was only 25, 26 years old, and the partner at the hedge fund said to him, yeah, I see you're making money in a certain way. I don't want to know about it, i.e. it's okay with me that you're insider trading as long as I have some plausible deniability. And that was unfortunate because that influenced him as a young man, right?

So I'm always looking for the people that have a zero tolerance for that. I'm 40 years in the business. I don't even have a personal trading account, so I can't insider trade.

But moreover, I have no blemishes on my record because I have a zero tolerance policy. So I'm looking for people that have a zero tolerance policy. By the way, they may perform less well than people that have paid SEC fines and have come to the near-death experience of going to jail, but they're typically better partners and better long-term partners.

And so we'll probably never be the top-performing shop, but I think we're the group of people that I like and trust. And what I tell my clients is if you want hedge fund exposure, our minimums are only $50,000. I always say we'd like to be the hedge fund manager for every dentist in America, but if you want hedge fund exposure, we can be your chief investment officer.

We can be your outsourced chief investment officer, select a diversified portfolio for you that will hopefully generate non-correlated returns for you and your family, and you won't have to worry about it because this is how we think about things. This is how we go about things. But that's our process.

Process is basically operational and compliance first, and then performance. Performance is a close second to those things, but those things, frankly, are first.

Nancy Lashine (20:07 - 20:12)

Right. And as so many of our friends and clients say, you sleep well at night.

Anthony Scaramucci (20:13 - 20:15)

Well, I want to stay young. I want to stay young. 

Nancy Lashine (20:16 - 20:17)

You look young.

Anthony Scaramucci (20:16 - 20:25)

I want to be overthinking this stuff. And also, what? Your kids don't listen to you.

this, Nancy, but they do watch you. 

Nancy Lashine (20:26 - 20:26)

Of course. Yeah.

Anthony Scaramucci (20:26 - 20:54)

They don't listen to a word you're saying, but they do follow your actions. Right. So my message to my kids is we have enough money.

The goal here, and first of all, compared to my grandparents or my parents, we had more money than we could want or need, thank God. I'm not saying you can always make more money, but I want to do it in the most ethical way. I don't want to do it in a way where I'm not in a competition with anybody.

I live in Manhasset in a suburban house. I'm not looking to... I don't need to...

Nancy Lashine (20:54 - 20:58)

If you are in a competition, you can never win.

Anthony Scaramucci (20:58 - 21:33)

There's always somebody with more. So Nancy, I'm 62. Let me just share this with some of your people, and this intuitively.

Let me say it plaintively. There's a paradox to wealth. You can get the wealth, and then you start buying the totems of wealth, and then it plays tricks on your mind.

I could have the 15-acre mansion in Old Brookville, but then my kids are lonely. They can't cross the street and go sleigh riding. They can't knock on the door of the neighbor and say, let's go ride our bikes.

Okay. Yeah. You can fly privately, but now you're flying privately by yourself.

You can be in the yacht. Now you're in the yacht by yourself.

Nancy Lashine (21:34 - 21:39)

I was thinking about your house on Webster Avenue and how lucky you were to be able to walk to school. Yeah, sidewalks are great.

Anthony Scaramucci (21:39 - 21:42)

I walked to school for six years. Yeah.

Nancy Lashine (21:43 - 21:43)

That's awesome.

Anthony Scaramucci (21:44 - 22:11)

My kindergarten was actually at the Merriman School, which is not there anymore, but there was a little kindergarten up the block that you had to take a bus to. But I walked to school as a kid. We were latchkey kids.

There was no helicopter parenting back then. Folks didn't know where we were, but it was a nice way to grow up. People said, well, you had such a small backyard.

I said, well, you actually didn't because a half a block down the street, there was like 12 acres. It was a 12-acre backyard, which happened to be my elementary school.

Nancy Lashine (22:11 - 22:29)

Yeah. I know. It's awesome.

Most of our listeners are in the real estate business. I want to talk about real estate for a bit. I know, I guess it was back in 2018, you started an OZ fund and announced it would be a $3 billion target.

It didn't happen at that size.

Anthony Scaramucci (22:29 - 22:31)

One of the many things I've gotten wrong.

Nancy Lashine (22:31 - 22:41)

Tell us a little bit about why you launched that and why didn't the capital show up for the Opportunity Zone function?

Anthony Scaramucci (22:42 - 25:04)

First of all, I got that wrong. That was an outsized judgment by me, but I think that you guys in real estate, and you probably know this, my first job was in the Goldman Sachs real estate department. I worked for Mike Fascitelli, went on to become the CEO of Vornado, very good friends with Barry Gosin over at Newmark, Jimmy Kuhn.

I know all of these guys from my real estate experience. I also remember Bernie Mendick. You may remember Mendick before Mendick was sold to Vornado.

I've had a long career of being involved with and managing money for some of the real estate executives in New York. There's an adage, which we all know in real estate, that it's location, location, location. One of the problems with the Opportunity Zone, and just to remind people what it was, President Trump signed legislation that allowed you to have tax deferred or effectively tax free capital gains in certain areas of the country.

If you were willing to buy a piece of real estate in that area of the country and hold it for at least 10 years. If you did that, when you went to go sell it, you got no federal income taxes on that gain. We thought and others thought that was going to be a huge business.

I went out to raise that fund and it was unsuccessful. The adage that location is actually never been more true, Nancy, because one of the problems with those Opportunity Zones, one of the qualitative metrics of it was income areas of the country that weren't doing well, et cetera. Guess what?

Those areas typically have bad location, location, location. That's why we weren't able to do it. The hallmark of real estate, which you know, is location.

We know from Port Washington, from Midtown Manhattan to places in Brooklyn, Queens, you pick it, Nassau County, the Hamptons, you and I both know that I can pay a premium price for a location. The odds are that someone's going to pay a higher premium price for that location years from now from me or from you. We know this because location really does matter to people.

Nancy Lashine (25:05 - 25:13)

Have you followed some of the OZ funds? I think you're still on your platform. How have they done in the last, whatever it is, six, eight years?

Anthony Scaramucci (25:16 - 26:31)

Well, not well. I mean, so there's been a private equity crisis. We bought one business, which unfortunately I had to announce last year that we're probably not going to make money and we're probably going to lose our equity in a hotel that we bought in New Orleans.

I had to make that announcement. A lot of people were mad at me, but I think now people do appreciate the fact that I'm a truth teller and I got the bad news out quickly because look at what's going on in the private fund space now, the direct lending space. There's three or four hotels in New Orleans that have already gone belly up.

Our hotel's at least still in existence, thank God. But I think how have they done? Not well.

They have not done well for a combination of reasons, rising interest rates. When people bought a lot of things in the opportunity zone space, they were at lower adjustable mortgages. And then when those mortgages came due, they had to pay higher rates.

And some of them were paying higher rates contemporaneous to market valuations of the actual properties going down. So either they had to put more equity in or they had to abandon ship and seek foreclosure. So it's been a mixed bag.

I'm sure there's a few that have done well, but I don't know many.

Nancy Lashine (26:33 - 26:59)

It's not actually isolated to opportunity zones. Real estate's been a very tough performance over the last several years. So tell us your views.

You've been one of the most vocal Wall Street voices on macro risk out there. The tariffs, the Fed path, the Iran conflict most recently. How does all of that play into your view about the real estate equity opportunities going forward?

Anthony Scaramucci (27:02 - 29:04)

Look, I mean, I've been pretty open about this. The administration, President Trump campaigned on lower prices, ending forever wars and trying to boost the economy. We've raised every price in America, either through a combination of tariffs or starting another forever war.

And so a result of which the economy is moving slower than it should. There's a risk now of stagflation. And just to remind people what that is, from the 1970s, we had periods of high interest rates, high inflation and no growth.

And so that is a really bad sign of you losing jobs and having inflation. Typically when you're losing jobs, the Fed can lower rates and then you can create growth. But when you have high energy prices and you do that, then you've got a real problem.

So for me, what I would tell you is that we're going to be in for it for a while. Real estate prices have slipped here. They've certainly wildly slipped in Dubai.

You try to sell your condo now in Dubai, you're going to have to take a 30% price cut right off the bat from where it was six weeks ago. That oasis has turned into a mirage for a lot of people as the missiles and drones are raining down on the city and disrupting the airport and so on and so forth. I also think the UAE government has to rethink the policy of, I guess some British citizens filmed some of the airstrikes and the UAE said that they weren't allowed to do that.

And they've now potentially subjected to two years in prison. And so I'm not sure if you want to... I mean, I get the fact that it's a tax shelter and I now know that we've turned a tax shelter into a bomb shelter, but I don't know if you want to do that to people.

I think they have to rethink that and hopefully they will, because I definitely like that government and I like those two cities, Abu Dhabi and Dubai. But prices are down. I think prices though, and this probably better than me, but I think prices are sticky upward in New York.

They feel like they are.

Nancy Lashine (29:04 - 29:12)

I feel like everything going on now is inflationary. Everything Trump has done is inflationary, whether it's the things we've just talked about or the infrastructure policies.

Anthony Scaramucci (29:12 - 30:34)

And good real estate can be an inflation hedge. You get increase in rents and you get increase in price as a result of that. We know that about real estate.

But I mean, that's the irony of what happened here. Listen, I've been critical. I know this isn't a political podcast, but I just think that you're asking me about the macro situation.

You really put the Fed, the future Fed chair, Kevin Warsh, somebody that I do know, met many times. You put him in a box. What's that box?

You put him in a box where he's now jammed. He would like to lower rates. He testified, or at least was interviewed, hasn't testified yet for the Senate confirmation, but he's been interviewed about the notion of lowering rates.

But even Trump appointed Fed governors have voted now to not touch rates and to potentially raise rates as a result of the specter of supply shock inflation inducted by the oil situation coming out of the Iranian war. So we're going to be in the soup for a while. And this is impacting the private credit space.

A lot of people have gated their funds in private credit. This will impact real estate in some of the other areas of the country. For some reason, I feel like it's still fairly sticky upward here in New York.

You'd have to explain to me better why that is. And we have a lot of crane activity here in New York.

Nancy Lashine (30:34 - 30:37)

You're saying that there's more optimism or prices are...

Anthony Scaramucci (30:37 - 30:42)

I feel like the prices are still reasonably firm in New York. Am I wrong in saying that?

Nancy Lashine (30:42 - 30:59)

Well, New York City office and residential and retail, it's all very firm in New York. It's because of population. People want to be here.

So you've seen office rents just explode in the last two years for the prime. A minus through A plus is...

Anthony Scaramucci (30:59 - 31:26)

Yeah. I'm a New Yorker. Look, you're looking at a person that has lived in New York for 62 years, other than the time I was in college, I should say. But I'm a New Yorker. I built my business in New York City. I live out here on Long Island.

I have no other homes outside of the state of New York. I'm not a Floridian. I'm paying my taxes happily. People say, oh, you're dope to pay taxes, move to Florida. I don't want to live in Florida. This is where the action is.

Nancy Lashine (31:29 - 31:37)

Given sticky upwards of interest rates, inflation, where are you investing today? What do you like?

Anthony Scaramucci (31:39 - 32:12)

Listen, everything's down right now. When you're in a situation like this, you're in correlation, markets near correction territory. I guess you could say, well, not everything, Anthony.

Oil's up. Oil's moved $50 in the last five, six weeks since the war started. But to me, I think we're in a correction market.

We're not in a full bear market. We're in a fairly steep bear market for crypto, which if you're a believer in crypto, you'll believe it comes back. You want to hold that stuff or potentially buy into that weakness.

Nancy Lashine (32:13 - 32:16)

Are you still a believer in crypto?

Anthony Scaramucci (32:16 - 32:53)

Oh, sure. Yeah. I've been buying.

If you saw me yesterday, I was in there buying. I buy at the beginning of every month, no matter what the price is. That's served me well over the last five or six years.

I would just say to people on digital assets, Bitcoin specifically, have to do your homework. Do not buy Bitcoin unless you're willing to spend at least 15 hours reading, studying, and understanding Bitcoin. I would not be buying Bitcoin if you're just doing it As a speculative buyer or something like that.

Nancy Lashine (32:53 - 33:28)

Yeah. I'm laughing because I did that probably 12 years ago when our son went off to college and he was an early Bitcoin advocate. I had to start understanding what it was.

That served us well. I told him if he didn't go to graduate school, he could keep the money I gave him and keep investing it in Bitcoin. What I learned more recently is how much the market has evolved and changed as it's become more part of the macro markets.

There's so many traders in there. The volatility and the reasons why it moves has just changed a lot in a decade. What are the things that- 

Anthony Scaramucci (33:28 - 33:59)

I was a Bitcoin skeptic. I became a Bitcoin believer after doing the homework. Stan Druckenmiller, Ray Dalio, Paul Tudor Jones, Mike Novogratz.

There's a very large group of people. They started out as Bitcoin skeptics. I would just say to people, if you do the homework, you move from Bitcoin skeptic into Bitcoin believer.

I'm not saying 100. If 100 people did the homework, I'm not saying it's 100 people, but it's probably 90 or 95 people.

Nancy Lashine (33:59 - 34:17)

About seven, eight years ago, I started focusing on tokenization of real estate. I think you've got a program in that area as well. What do you call it?

Oh, 300 million to fund assets in avalanche. Tell us about that. What are you trying to accomplish?

Anthony Scaramucci (34:18 - 35:12)

That's been a huge benefit of those. We tokenized our fund. Now, we can go out to some of the new investment fintech firms who sell tokenized products to retail investors.

Our product is on their platform. We have been able to garner new assets as a result of that. Put simply, right now, to buy into our fund, you have to fill out a subscription document, and you have to check off this whole list.

If you have a tokenized fund, if you've let the people know inside the token from a KYC, know your customer, CML perspective, anti-money laundering, anti-terrorism perspective, that you're a legitimate customer, you can just buy it like you could buy a share of stock, which is something people will understand. You call your broker to buy this stock-

Nancy Lashine (35:13 - 35:16)

It's like having clear when you go through the airport, you're pre-approved.

Anthony Scaramucci (35:16 - 36:43)

It's like having clear going through the airport. What's going to happen is we're going to tokenize everything because that rail system is way more efficient. That rail system is a easy system, and it's secure.

When I started in the business, Nancy, 38 years ago, it was T +5, meaning if you were selling your stock, and I wanted to buy it out of your account, it went through seven different entities, including the Depository Trust Corporation, and it ended up in my account five days later. It's now T+1. What we know that we can use over the blockchain, if we tokenize these things, we can go to T + an hour or T+ minutes even, and that will make things cheaper.

That'll make things more efficient. We also know that we can use the digital technology. We can use the blockchain technology to transact without third parties.

There could come a day you walk into the restaurant and you have digital coins or  U.S. dollar in your wallet known as stable coins. You pay for the meal at the restaurant by asking the waiter what his wallet address is or the restaurant's wallet address, and you send it directly bypassing the three and a half percent charge from the third party credit card vendor, and so that's coming, and that'll be a big cost savings for people. I'm sorry?

Nancy Lashine (36:44 - 37:06)

Yeah. You mentioned stable coin, and it just made me think about what's going on with stable coins. Are you concerned that the Trump administration's, what Trump is doing in this space will somehow, I'm going to use the word, the corruption and the self-interest that's going on there, will somehow taint this business for some period of time?

Anthony Scaramucci (37:06 - 37:55)

But it already has. One of the reasons why we're in a bear market, when the president launched a meme coin with his name on it, and then an additional meme coin with his wife's name on it, and they took six, seven, eight hundred million dollars out of the thing, and the coin dropped from par down 96 percent, and they took eight hundred plus thousand wallets, took those wallets to zero, and took all that money for themselves, I think it left a very poor taste in many people's mouths, and I think it also upset the opposition to Donald Trump on the side of the Democrats, where even if they were pro-crypto and wanted legislation that was going to be beneficial to investors and consumers and crypto exchanges, they won't vote for it.

Nancy Lashine (37:55 - 37:57)

How long is it going to take us to get past that?

Anthony Scaramucci (38:00 - 39:01)

I don't know the answer to that, because I think when you're telling people that you're going to attack Greenland, which is a NATO country, and you are going to war in Iran without selling it to the American people or even to the American Congress, in protest, you end up having ancillary problems. It's not like people view these things in a vacuum. If you go to a holistic medicine person, they'll tell you that your mind and your body, guess what? You're living in the same vessel. They're connected to each other, and so your stress will impact your organs, et cetera, and guess what? Your actions in Greenland and Iran are affecting the voting on the crypto regulation.

It just is. People are saying, hey, he wants that, so therefore, we don't want it, and that slowed it down. I predicted that when he started taking that tact of putting out a meme coin for himself and his wife, I said, okay, that's going to hurt our industry, and it ultimately has.

Nancy Lashine (39:01 - 39:05)

Yeah. Do you see a bull market coming back in your career for crypto?

Anthony Scaramucci (39:07 - 40:04)

Yeah, I do, because I understand how the algorithms work, and I understand the math of demand and the short supply of Bitcoin, and so I think we're in a typical bear market. We're through the half of the halving cycle, so we're in the second year now, heading towards the third year of the halving cycle, and so what typically happens is you have a down 50% move in Bitcoin. If you look at the last four cycles of Bitcoin since the inception of Bitcoin, you go down 50% in the third year of the halving cycle.

You don't really start to recover until October, until the beginning of the fourth quarter of that year, and so I think we'll start to see a recovery in Bitcoin, more specifically Bitcoin than some of the other assets, by the fourth quarter. Could be wrong. Listen, Nancy, I've been humbled by life.

I've been humbled by markets. I've been humbled by politics.

Nancy Lashine (40:05 - 40:07)

But you have an opinion, so that's good.

Anthony Scaramucci (40:07 - 40:41)

I'm not going to speak definitively, because I've been kicked in the teeth too many times, but I can tell you my proclivities that we are going to make a lot of money in Bitcoin over the next three to five years, and your son that you referenced is the person I'm looking towards, because in 10 years, people that are his age will have more senior positions in asset management, and in 20 years, even more senior positions in asset management, and they're very comfortable with this, and so that's what I think is going to happen.

Nancy Lashine (40:42 - 40:45)

And we may have a libertarian in the White House, but that's a different story.

Anthony Scaramucci (40:46 - 41:06)

Let me tell you something. We're in trouble, so the current duopoly, this current monopolistic two-party system that acts as one, which I would call a duopoly, is failing the country. And I think the people are getting tired of it, and so we'll see.

Maybe there'll be a break now.

Nancy Lashine (41:07 - 41:22)

Maybe. You mentioned what's happening in Dubai and the UAE. You have a lot of friends and contacts in the Middle East.

What are they saying about investing in the U.S. today, and how are they viewing the opportunity for themselves here?

Anthony Scaramucci (41:25 - 43:41)

I mean, I take them at the word. the ambassador, Youssef Al Otaiba, said he's the UAE ambassador to the United States, that they're going to continue, despite what's going on in Iran, they're going to continue to put the $1.4 trillion into the U.S., that they said. The U.S. is still arguably one of the safest markets. It's got generally predictable rule of law. The executive branch of the United States is putting pressure on some of the institutions, but generally, people feel good about them. And so it's a deep market.

It's the most liquid capital market in the world. And I think we're going to be okay. I think one of the big problems here is we have to address the elephant in the room, and that is the people that grew up on Webster Avenue with me, whose fathers were in landscaping or cutting deli meat at Harvard Deli or doing different things like that.

They thought they were going to get ahead. Lots of those people that grew up in blue-collar neighborhoods now don't think they're going to get ahead, and they're angry about it. So if you go from aspirational, working-class families to desperational ones, they get pissed, and they start going towards the anger-based politicians on the left side of the equation, left-leaning populace, right side of the equation, right-leaning populace.

And so my message to people that want to fix this, help those people. And some of it's related to affordability, inflation. Some of it's right-sizing our deficits and so on and so forth.

This stuff has to get fixed. Otherwise, the people are not going to want to invest in America anymore. You're going to bust the system. You'll cause a break between the consistent, decentralized nature of the government and the predictable rule of law in the country. Once you do that, you'll lose the risk premium adjustment in America. Generally, America, over the last 80 years, has been viewed, because of its property rights and its fairly stable form of government, it's been viewed as a good area to invest in.

But if you're going to have anger-based populism, Trump could leave office and a left-wing populist could take place. That could be even more damaging than Donald Trump. So we'll have to see.

But it's fluid, Nancy. It's fluid. I'm generally very optimistic about America.

Nancy Lashine (43:41 - 44:57)

Let's focus a little bit about resilience and advice. I love this book, by the way. Your book about from Wall Street to the White House and back.

So many good stories and lots of good advice. So broadly, for folks who are listening, they're in the real estate investment management businesses. I have been for four decades.

It's gone from just being focused on real estate to really focusing more on alts. And the whole part of the portfolio that is alts is people are starting to look at it more as a single risk-return bucket, if you will. So what that has meant is that the large managers have gotten larger.

If you look at the amount of capital that's going to the largest managers, many of whom are public, it's just increasing as a percentage of the total outflow. The small managers are much more niche and operators and are struggling to raise capital directly from institutional investors. And then the big swath of managers in the middle are trying to figure out where to do, what to go, how to go.

If you were to give advice today to one of these managers who's struggling to raise capital, and you've been in that position in the businesses that you started, what's the one piece of advice you would start with?

Anthony Scaramucci (44:59 - 45:32)

It's very simplistic advice. What Winston Churchill said is, when going through hell, keep going. That's the advice.

You can't be a baby. Don't be a whiner. As I pointed out in that book that you just showed, and thank you for reading it, I got fired from the White House.

I got torched by the mainstream media, torched by the cable news pundits, torched by the late night comedians. And I ended up making friends with them. Didn't care. I'm not a baby. Don't be a whiner. People get punched in the face. What happened to me wasn't a health scare, thank God.

Nancy Lashine (45:32 - 45:37)

So what questions should they be asking that they probably haven't thought to ask?

Anthony Scaramucci (45:38 - 48:09)

I think the question that they should be asking is, how much do you love what you do? Because if you love what you do, then what's going on day to day shouldn't be any big deal to you. If you love what you do, and you've asked 1,000 people for money for your fund, and 1,000 people said no, you should be fired up about asking the 1,001st person.

It's like the kid that was digging the horse manure in the stable, and the guy went over to him and said, what are you doing? He said, there's got to be a pony in here somewhere. I want to keep digging.

And the point of the matter is, if you love what you do, then you love what you do. And if you love what you do, you keep your mouth shut, and you keep going. And so to me, people give up at the worst possible times.

I've seen people get flushed out of Bitcoin at its low. One of my friends sold his Solana at 7, 8, 9, I think it was. What the hell is this guy doing? We were buying it at that time. Now, it did go to 260. It's now at 80. It's down 70%. So you could say that I'm wrong, and I got everything wrong. Maybe. Or you can be a long-term investor. Let's look at it five years from today, and then you can judge me in terms of whether I'm right or wrong. But if you're in hell, keep going and revisit.

And by the way, let me tell you something. This is something that I live by, and I'll share with everybody. My spiritual leader is Mel Brooks. Mel Brooks, the American comedian, young Frankenstein, blazing saddles, the producer. Mel Brooks would say, relax. None of us are getting out of here alive.

And that's how I run my life. And so the worry that's in your mind today, you're going to be dead for a very long time. So take it easy.

Don't get yourself too worked up at the bottom. Don't get yourself believing your own BS at the top and get to work. Those are my messages for those people.

And by the way, some people say, oh, you're a resilient guy. I don't have a choice. I got to take care of my mother. I got to take care of some of my family members that unfortunately haven't done as well as me. I got to look out for my in-laws. I got to get up and go to work.

And if someone's playing a self-victim or pitying game, which I think is the worst human emotion, get over yourself, shut up and get to work. And so those are my messages.

Nancy Lashine (48:09 - 48:11)

I hear that.

Anthony Scaramucci (48:11 - 48:16)

I mean, it's not the easy love messages, Nancy, but that's-

Nancy Lashine (48:16 - 48:18)

And if you think more about the markets-

Anthony Scaramucci (48:18 - 48:23)

 Do you think your father wanted to get in that crane every day? You think in, you live here-

Nancy Lashine (48:23 - 48:24)

He did what he had to do.

Anthony Scaramucci (48:24 - 49:16)

When it was minus five degrees in early February of 1973, do you think he wanted to get in that crane? And by the way, you have to grease that crane every two hours to protect it from a safety thing because the bucket is very heavy. You got to make sure the bucket doesn't break and the cables are strong. So you got to get out in the cold weather and grease that crane every two hours. You think he wanted to do that? when I got my job at Goldman, my father said something to me that I'll share with you.

He said, I never want you to complain about your job. And I said, why is that, Pop? He said, well, number one, you're indoors. You're at a direct sunlight and there's no heavy lifting. Okay. And so when you're driving by people that are outdoors in direct sunlight and heavy lifting, keep your mouth shut and keep working.

Okay. And I think people need an attitude adjuster.

Nancy Lashine (49:16 - 50:08)

People need to think about it. But also my mother would say, so my maternal grandfather died in the 1918 influenza epidemic. And my grandmother raised the two kids by herself with a little corner newsstand newspaper.

They sold newspapers, sodas and candy bars on the corner of Williamsburg. And so my mother is a little kid used to go down and work there. And she would say to me when I'd come home from my job at an investment bank, so did you make any money today?

Or how much money did you make today? Because in her mind, when you went to work every day, you collected the nickels and the quarters from the customers. And it always reminded me that it's so easy to get complacent when you have a desk job and you're not literally thinking about what was the profitability of what you did that day.

And that's always motivated me to kind of get in in the morning and say today, I got to make a difference.

Anthony Scaramucci (50:08 - 50:21)

Well, so you got such great energy though, Nancy, you've got such a great attitude and perspective. And so you got to carry that with you in life. To me, energy attracts energy.

I want people around me that are gung ho.

Nancy Lashine (50:21 - 51:38)

So put your investment hat on for one last question. A lot of people listening have been in the real estate business now. Maybe some folks have just been in since 2020 when the market's been challenging.

Some folks have been in since 2005 and they've seen some cycles. But it's been probably the longest tough cycle of the last 30 years. Most people who've been in real estate since the 1980s have just had inflation, had rates coming down and just the wind at our back.

And it's been a relatively easy time. And now a lot of investors are frustrated about real estate, but you look at private credit with all the issues there. You look at the volatility in the equity markets and you look at private equity, which hasn't necessarily performed the way people expected, where you've had much longer holding periods and the inability to get out and probably a lot of valuations that were too high.

So real estate is starting, the cycle is starting to turn. People are looking again and saying, if we have long-term inflation, can we find good real estate that will be a good inflation hedge that we can buy in the world of, call it, four, four and a half percent interest rates? What advice would you give those folks or folks who are listening today who are trying to invest in real estate, they're dealing with the current challenges?

Anthony Scaramucci (51:40 - 53:23)

So this is such a great question. And what I always tell people, great leadership is not knowing the answer, but great leadership is asking the right questions, right? Because you'll get to the answer.

If you can ask the smartest people, maybe it's even AI now, the question, but the real, the first question is, are we in a cycle? It may be a long cycle down or a long cycle stagnant, but are we in a cycle? Are we in a secular trend?

So let me just give you an example. If you're in the horse and buggy business and there's something being developed called the horseless carriage, okay, are you in a secular trend downward or are you in a cycle? And the answer is you're in a secular trend downward.

So that's the first question. Okay. So I'm going to answer that.

My gut tells me that we're in a cycle and that the real estate will pick up, particularly the real estate in good markets and in good locations. The second question is really one about the future of work, because you have to tell me how we're going to be working. Are we going to be working more from home?

Because that probably means bad stuff for suburban offices and bad stuff for non class A office space. Okay. And I think that answer is yes.

So now we have to be selective about the real estate that we're going to be pursuing and the real estate we're going to be investing in. And then the third question, which I think is also another interesting question, is you mentioned the interest rate cycle. And so where are the interest rates going?

Are they going up from here or down? And I'm going to tell you, my belief is they're going way down. And you're going to say, ooh, they're going way down.

Nancy Lashine (53:24 - 53:25)

Yeah, I didn't expect that, Anthony.

Anthony Scaramucci (53:26 - 54:01)

Yeah. And because there's a contrarian view based on the productivity that's going to be unleashed in the world related to AI. And you're going to see prices come down and you're going to see productivity up.

You're going to see logistics get improved. There'll be robots delivering your Amazon. There'll be drones dropping it off at your front step.

There'll be a whole host of things that are happening. If you've ever gotten yourself in a Waymo out in Los Angeles, my friend started out with NFW, I will never be in a Waymo.

Nancy Lashine (54:01 - 54:27)

But can I tell you a quick story? So last night's Passover, we're having our Seder and our daughter calls us from San Francisco. She's in a Waymo.

And she said, and she's a big believer in driverless cars. It takes them all the time, but it made a wrong turn and took her. She was going the wrong way across the Bay Bridge all the way to Oakland instead of where she was trying to go in San Francisco. And I just laughed because they're not perfect.

Anthony Scaramucci (54:28 - 55:02)

Well, they're not perfect, but they are changing the way things happen. And they are going to, if they become less imperfect and slightly more perfect, and you're going to be reducing the cost of these trips for people, which gives them more money in their pocketbook and all of a sudden prices are going lower. So I really do appreciate being on though. It's been an incredible conversation for me and listen, yeah, look, I think the best days for us are ahead of us. We just got to just keep working. That's my message.

Nancy Lashine (55:02 - 55:10)

You're the best, Anthony. I really love your energy, love your transparency, and you've really helped so many folks and appreciate your coming on.

Anthony Scaramucci (55:11 - 55:14)

It's good to be on with you. Happy Passover to your family, happy Easter to everybody as well.

Nancy Lashine (55:14 - 55:49)

Thank you and happy Easter. I hope you enjoyed this episode of Real Estate Capital. Before you go, I have a quick favor to ask.

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