How Buffett's NYC Real Estate Play Tripled in Value

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March 6 (Bloomberg) -- Bloomberg News’ Noah Buhayar looks into the return on a 1993 New York City real estate investment made by Warren Buffett on Bloomberg Television’s “In The Loop.”

Is noah who covers berkshire hathaway for bloomberg news.

I was talking to other property developers and they said there was nothing remarkable about the deal.

It is simply what we do, buy and hold investments, and a payoff.

The other interesting thing to notice is when they bought, and that his 1993, and who they want from, -- bought from.

That is a key component.

If you go back to the letter and what he said there, he really highlighted how the property had not been managed terribly well by the company, and what happened was through good management they were able to bring the rental income up.

They were, and i asked warren buffett about the tenant, and he said it was well worth.

That will worth.

-- woolworth, a tenant that was paying far less.

The back story to this is how the two, larry and warren buffett met, which all went back to the days of solomon brothers one warren buffett was ceo of the firm.

Solomon was the largest tenant at seven world trade center.

This is the way billionaires work.

He goes to larry and says find an investment you would want to invest in and i will put my money in.

In many ways, it is classic warren buffett.

These investments born out of personal relationships, and if not that, casual conversations.

One more recent example is warren buffett it up the phone and called brian moynihan in 2011. he thought of the idea in a bathtub.

Radcom exactly.

[laughter] -- right, exactly.

[laughter] you can see the affection between the men.

I want to read some comments that were e-mailed to me.

Warren buffett, to your point, noah buhayar, e-mailed me yesterday, and said i have given larry silverstein all of my various phone numbers and told him he could call me day or night because he felt the investment paid off so well.

Larry silverstein e-mailed me and said considering we are both in our 80's he thought it was important to express his gratitude while he could do it and i could hear it.

These are long-term friends.

Right, answering i have a sense of humor about this, which is fun to read about.

[laughter] right.

Let's look at warren buffett's portfolio.

He buys and he holds forever, for example, like with coca-cola.

It was one of the things he wanted to highlight this year.

The market, if you are looking at the valuation or the price quotes every day, it will throw out crazy numbers, but if you are in the mentality where you are thinking about what an investment can produce rather than what it is worth on any given day, you can do well here it you can do well.

-- you can do well.

You can do well.

That is one of the points he was making.

When you read the letter, he is looking at what is berkshire's share of coca-cola's earnings, ibm's earnings based on the stockholding in the company?

He thinks about the stockholding as ownership stake.

Which is similar to this little deal.

He basically only owns 5% of this retail space, but it also goes to the point that he has talked about -- invest what you know.

If you can understand it, invest.

He has not actually ever seen the property, but it is in a good location, manhattan.

Next to nyu.

Next to nyu, college students going to the stores, and he said it has to be a good investment.

That is what other developers in new york say.

Location is important and it is simple, if it is a good location, it will make money for you.

That is what warren buffett has said, know what to invest in.

Know how it works.

Thank you, noah buhayar, of bloomberg news.

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This text has been automatically generated. It may not be 100% accurate.


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