Alternative Investing Report - April 3, 2025

*as of 4/2; Sources: S&P, BTC, FTSE, DJRE, GOLD

The administration unveiled its sweeping tariff policy, instituting a base 10% tariff on imported goods from essentially every country in the world - including some uninhabited islands. Certain countries face higher rates, which may be the result of what appears to be dubious math. While the markets were closed by the time the announcements were made, equity futures have taken a massive hit in after-hours trading, with the Dow, S&P 500, and Nasdaq all down 2%-3%. Crypto markets also fell in the wake of the announcements, and European and Asian stock markets have also taken a significant hit.

➨ TAKEAWAY: The tariffs were higher and more comprehensive than expected, and there are indications they could lead to a global recession. The head of the EU said the tariffs would be a “major blow to the world economy.” Needless to say, the fallout from this policy promises to be significant, and you can expect investors to continue moving away from riskier assets.

The pandemic-induced era of remote work hit major cities like New York and San Francisco particularly hard, affecting office real estate and causing net migration away from those cities. Now, they look to be back on the upswing, with homebuyer demand in the Bay Area and New York rising sharply, and San Francisco seeing the biggest growth in listings selling above asking price. In Q1, the number of apartments sold in Manhattan rose 29% year-over-year, with total value jumping 56%. The growth was buoyed by increased demand in the luxury market, which had its best quarter since 2019. Even the office sector is rebounding, with leasing volume in Manhattan hitting its highest level since 2019.

➨ TAKEAWAY: As life has returned to normal, it turns out that people still want to live in top cities for the same reasons they always did. Return to office mandates have also helped, encouraging people to move back, and companies to lease more office space. Real estate is a long-term play, and investors who bought low during the pandemic are reaping the benefits now.

🚀 CoreWeave rebound: After seeing its share price decline in the two days after its public offering, CoreWeave’s stock has risen to $61 per share for more than a 50% gain since the IPO.

💵 Private markets for all: In his annual letter to investors, BlackRock CEO Larry Fink promised to “unlock” private markets to all investors, and that the new standard for portfolios should include 20% of private market assets.

🏡 Tariffs could hit real estate: The newly announced tariffs are likely to lead to higher homebuilding costs, and could keep mortgage rates higher if they have the anticipated inflationary effects.

🎨 Newly attributed Turner painting: An 1840 painting has been authenticated as one by British artist J.M.W. Turner and is now up for sale for $41 million, which would be a windfall for the current owner, who purchased it in 2005.

🏢 CMBS delinquencies: The overall delinquency rate for U.S. commercial mortgage-backed securities rose 35 basis points to 6.65% in March, with the multifamily sector seeing the biggest rise and the office sector was the only one to see a decline.

🏈 Pro flag football: Venture and private equity firms have submitted bids with the NFL to invest in new men’s and women’s professional flag football leagues, as the league tries to capitalize on the popularity of one of the fastest growing sports in the country.

One major concern about the proliferation of AI tools are their use in education, namely that students are using these services to cheat and do their homework for them. In response, the AI startup Anthropic just launched Claude for Education and is partnering with Northeastern University, the London School of Economics, and Champlain College. The new version of its AI assistant is designed to facilitate learning rather than just feeding students answers, acting more like a teacher than a search engine. Anthropic is making a potentially lucrative bet that AI can be a tool to help students learn, rather than a tool to write their papers.