The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian realtors believe the FTX crypto currency exchange’s implosion will not “ruin” western New Providence’s high-end property market as bargain hunters start to circle its $74m worth of holdings.

George Damianos, president of Damianos Sotheby’s International Realty, told Tribune Business that real estate demand in the area was broad enough, and deep enough, to absorb the FTX properties without a blip whenever they were released to potential buyers.

Pointing out that they were likely to be tied up by FTX’s collapse, and left in the hands of its joint provisional liquidators for some time, he added of the crypto exchange’s failure: “I would say within reason that I don’t think it will have any effect at all. I think most of this stuff is on Albany, and while people are asking us obviously, I don’t anticipate any fall-out and I don’t think it will have any impact now or in the near future with them hitting the market.

“I think Albany will absorb those apartments... I don’t see any reason to have high hopes it will ruin the market, result in a reduction in prices or freeze on our real estate market. It’s going to be a while before any of those properties hit the market and are sold by the joint provisional liquidators. Hopefully we will go through 2023 without any major issues. We’re fine. We here in the west will be fine. There are no issues.”

Mario Carey, the Better Homes and Gardens Real Estate MCR Group Bahamas principal, told this newspaper that realtors are already fielding calls hoping to pick up FTX-related real estate assets on the cheap. “What I’m noticing is there are a lot of inquiries from persons who feel there might be an opportunity to get good real estate at an affordable price,” he said. 

“I’m told that everything with the liquidation, which is a difficult conversation to have, everyone is looking for an opportunity. It’s how the market responds to something like this. I don’t think there will be an impact on the luxury market at all. Any properties that come back on the market will be easily absorbed. It depends on the deal. If it is priced right, it will sell. If not, people may hesitate. The market will determine everything.”

Both Mr Carey and Mr Damianos wondered aloud whether FTX, and its senior executives, had paid or part-paid for their properties using crypto currency or even the exchange’s FTT tokens, which have now been deemed virtually worthless. Should that have occurred, sellers of such properties will be out-of-pocket and may struggle to obtain the full sales price.

Tribune Business was previously shown a report, which checks confirmed was genuine and had been well-researched, disclosing that FTX has acquired some $74.23m in west New Providence real estate during 2022 alone. Most of these purchases involved property in the high-end Albany community, along with the acquisition of units in the Veridian Corporate Centre, which was developed by Island Luck gaming tycoon, Sebas Bastian.

The acquisitions by FTX Property Holdings, the crypto exchange’s real estate arm, ranged in value from a high of $30m to $8.9m, $7.479m, $7.311m, $7m and $6.75m at Albany, according to the report, which was being widely circulated on social media. Some $4.5m was also spent to acquire the Bayside Executive Park site for its planned $60m headquarters, which is now almost certain not to proceed.

The report also showed a $2.29m purchase at the Veridian Corporate Centre. “The corporate offices for FTX are currently housed at the Veridian Corporate Centre, which was originally built and sold by Sebas Bastian,” the document said. “These are not rentals or leases. FTX has purchased these units outright.

“Additionally, there is one purchase of a condominium at One Cable Beach for $2m made by Sam Bankman-Fried directly in late 2021.” It is unclear whether the latter, especially given that it is in the FTX founder’s name, will be included in the provisional liquidation.

The same applies to the FTX Property Holdings. While this entity is Bahamian-domiciled, and likely to be affiliated with FTX Digital Markets and the local provisional liquidation, this newspaper has also seen documents that appear to include FTX Property Holdings among the entities covered by the Chapter 11 bankruptcy protection filings in the Delaware courts.

This means that the Chapter 11 proceedings may cover the liquidation and sale of FTX’s Bahamas-based real estate. This will likely be among the assets that the Bahamian provisional liquidators and Chapter 11 proceedings may be fighting for control over, unless a compromise can be reached.

Robert J. Ray, the chief executive for FTX Trading and the entities covered by the Delaware filings, also alleged last week that corporate funds belonging to the crypto exchange were used to fund Bahamian real estate purchases by its executives who then put the properties in their own, personal names rather than the company’s.

“In The Bahamas, I understand that corporate funds of the FTX group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of The Bahamas,” Mr Ray asserted.

Meanwhile John Christie, president and managing broker of HG Christie, backed Mr Damianos and Mr Carey in asserting that FTX’s crash has not impacted western New Providence’s high-end real estate market. “I’ve not seen any effect on the market,” he added. “As far as I understand everything is held up by the provisional liquidation and that could be years.

“I haven’t seen any rental properties come back on. I hope it stays that way. There’s certainly a lot of people out there looking to buy the properties. There’s any number of investors out there looking for a deal, so those will sell when they come back on the market. I think we’re OK for now, and will just have to see how it shakes out over the coming months. These things can last for years and years.”

Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, added: “It’s too early to tell what effect it will have. I don’t think it will be too serious, and I hope I’m right.”