Tuesday, November 08, 2005

King of real estate 'getting out'

"The world's best real estate investor has made billions in the U.S. market. Now he's cashing out and buying overseas. Should you cash out too?
By Shawn Tully

Tom Barrack is driving a dusty Chevy Suburban around his 1,200-acre mountain ranch near Santa Barbara, Calif. Nestled between the Ronald Reagan estate and Michael Jackson's Neverland, Barrack's spread is a medley of vineyards, pastures, and paddocks. Barrack cruises past the lovingly restored manor house, a rambling adobe aerie framed by allees of cabernet franc, then weaves through a cluster of stables sheltering 60 horses that munch homegrown wild oats. Even in this magical setting, real estate is never far from his thoughts. He stops the Suburban at his favorite spot, a vast polo field planted with delicate, lime-hued Bermuda grass that's easy on the horses' hooves.

Then Barrack launches into a parable. 'I feel totally safe playing polo on a field full of pros,' says the bronzed 58-year-old. 'But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back.' It's the same with the U.S. real estate market right now: 'There's too much money chasing too few good deals, with too much debt and too few brains.' The amateurs are going to get trampled, he explains, taking seasoned horsemen, who should get off the turf, down with them.

Says Barrack: 'That's why I'm getting out.' "

A great article by someone who should know what he's talking about. Read it all.

Chris Bell



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