Alternative Investing Report - February 18, 2025

*as of 2/17; Sources: S&P, BTC, CL50, DJRE, LIV-EX

The Bay Area’s housing market is on the upswing, with San Jose, San Francisco, and Oakland leading a new list of the top large markets in the country based on the yearly change in median sale price, the shares of homes that sold above ask, and other metrics. The bottom three large markets were Jacksonville, San Antonio and Memphis. A different study of 2024 price increases by metro area saw Upstate New York’s metros claim five of the top seven spots, led by Kingston, NY. The top six biggest declines in 2024 all came in Florida, led by Punta Gorda, FL.

➨ TAKEAWAY: The recent RE results continue to show that Florida’s real estate market is struggling due to a combination of oversupply, severe weather events, and rising insurance prices. Meanwhile, the Bay Area has been buoyed by a rebound in tech led by the rapidly growing AI industry. Proximity to New York City is also a plus, evidenced by the demand for Upstate New York markets, and also for Connecticut and New Jersey, which ranked #1 and #2 at a state level.

A “down round” occurs when a startup raises money at a lower valuation than its previous funding round, and it’s generally not a good sign for the company. Down rounds made up a record 15.7% of all VC funding rounds in 2024, with an additional 10% of rounds coming at a flat valuation. Half of all Series C and D+ rounds came from companies that last raised more than two years ago, at the 2021-22 heights of the market, so the prior round may have been at an inflated valuation.

➨ TAKEAWAY: Because of the general lack of liquidity in the VC ecosystem, there is less money floating around, and companies that need capital have to bite the bullet and raise rounds at terms more favorable to investors. Results falling short of the sky-high expectations of the pandemic bull market have also dragged on those business’ fortunes. The environment does benefit investors who have dry powder to invest and are eyeing bargain deals. For example, Reddit cut its valuation for its IPO, effectively raising a down round, though its stock price has skyrocketed more than 300% since going public.

🪙 Argentine President’s rug pull: Javier Milei is facing allegations of fraud and being investigated by a federal judge over his role in a possible crypto scam. After he tweeted about it, the $LIBRA coin - no connection to Facebook’s failed crypto project - spiked to a market cap of over $4 billion before quickly plummeting 95% in value. A few accounts made millions of dollars, while thousands lost money, and Milei’s opposition is now calling for his impeachment.

🚀 Turo cancels IPO: The car rental marketplace filed for an IPO in 2022, and despite being profitable, has seen slowing growth in revenue and net income. This is another example of a prominent startup staying “private for longer,” and a small blow to hopes for a strong IPO market in 2025.

🏢 CRE loans coming due: More than $950 billion worth of commercial real estate loans are maturing in 2025, a 3% increase compared to 2024, as high interest rates have caused more loan extensions with even more expected this year.

🎨 Claudel sculpture sale: A recently discovered copy of French sculptor Camille Claudel’s “The Mature Age” sold for $3.2 million, topping the pre-sale high estimate of $2.1 million.

🏈 NY Giants may sell 10% share: The NFL franchise, which has an estimated value of $8 billion, is exploring the prospect of selling a minority stake, which will likely attract the interest of private equity firms now that they are newly allowed to take ownership stakes in NFL teams.

⌚ Possible $20 million watch: One of only four stainless steel Patek Phillippe 1518s ever produced is being offered in a private sale for more than $20 million, which would make it the most expensive vintage watch in history. The last one sold at public auction in 2016 fetched $11 million.

If you’ve ever wanted to own your very own clock tower, a Cape Cod church built in 1836 and converted into a home in 1973 is on the market. The 3,442 square-foot residence has 3 bedrooms, 4 bathrooms, electrified gas lanterns, and one of New England's oldest working organs. Located in Yarmouth, a little over an hour from Boston, the asking price for this unique property is $1.99 million.