Alternative Investing Report - April 8, 2025

*as of 4/7; Sources: S&P, BTC, FTSE, DJRE, CL50

While commercial real estate as a whole is already seeing significant impact from the new tariffs, especially in rising construction costs, one sector in particular that could be devastated is retail. The National Retail Federation (NRF) now projects the growth of U.S. retail sales to slow down, and said that the costs will disproportionately impact small retailers. But large retailers such as Walmart and Target are also going to likely see a slowdown in sales, as consumers see reduced purchasing power, and all goods get in line for price hikes.

➨ TAKEAWAY: The silver lining is that the retail sector has been particularly strong in the past year, with record-low vacancy rates and increased leasing demand. But the longer the new tariffs remain in place, the harder it will be for some businesses to stay afloat, which does not bode well for owners of retail real estate.

In the newest episode of Smart Humans, Vincent founder Slava Rubin talks with Worth Media Group Chairman and 1-800-FLOWERS.COM founder and Chairman Jim McCann about diversifying across alternatives, scaling to a public company, and being curious.

Sotheby’s wine and spirit auction sales totaled $114 million in 2024, a 28% decline from $159 million in 2023. Bordeaux remained the leading wine category, making up 34% of all sales, while Burgundy dipped to 15% from 27% two years ago. Overall, 18% came from the spirits category, compared to 21% in 2023, with Karuizawa leading the way with five of the top ten spirit sales of 2024. The U.S. remains the biggest spender on both wine and spirits, but the Asian market is steadily growing.

➨ TAKEAWAY: The wine market had a tough year, with the Liv-Ex 1000 dropping by 11.8%, and overall wine sales continuing to decline. Looking at specific sectors, Japanese whiskey is rising in prominence, and while French wine remains dominant - particularly Domaine de la Romanée-Conti - its market share continues to decrease as buyers show interest in other regions.

🪙 Bitcoin bounces back: After hitting its 2025 low near $74,000, Bitcoin rebounded to around $80,000 on Monday, as the crypto market as a whole rose more than 5% overall.

🏡 Most affordable states: The Midwest has the most affordable states for families looking to buy homes, with Ohio, Michigan, Illinois and Iowa leading the way. On the other hand, Hawaii, California and Montana are the least affordable states in the country.

⏸️ Paused IPOs: Both Klarna and Stubhub have reportedly delayed their IPO plans indefinitely, waiting for less market volatility.

💵 Investors leaving private equity: In the wake of the market correction, large institutional investors are seeking liquidity and looking to exit stakes in private equity funds, most likely at a discount. In response, shares in giant private equity firms such as Blackstone, KKR, and Carlyle have all seen significant declines.

🎨 Tariffs and the art market: Beyond the effects of a declining global economy, the art market will be affected by tariffs as they drive up not just the price of importing and shipping international artwork and antiquities but also raw materials and supplies.

🚀 Rippling valuation rising: The business software startup is in talks to raise a new round at a $16 billion valuation, a solid gain from its last valuation of $13.5 billion a year ago.

A vacant entertainment venue that was formerly City Winery in the Ivy City neighborhood of Washington, D.C. is heading for auction on April 21. The 36,950 square-foot building features two roof decks, a full commercial kitchen, and upscale finishes throughout. Retail properties in the area have averaged a sales price of $428 per square foot in the past year, but bidding starts at just $1.8 million, which is $49 per square foot. The property last sold in 2014 for $5 million.