Blog: Grant Cardone Lays Off 80 of His 180 Employees Without Notice: 10X Being Hammered to -OX by the Coronavirus? - 2020-03-24
Karma's a bitch: Many people who have lost their jobs in layoffs won't be able to pay Cardone the rent on his apartments. In this economy, it's going to be harder than ever to evict tenants. In some jurisdictions, evictions have been made illegal. Other people may stay in Cardone's apartments as long as they can, bail out on back rent owed, and then move in with their families or find cheaper rent elsewhere. Cardone arrogantly bragged in a video the other day that the courts aren't open and so no one is going to sue anyone. He seemed to be alluding to the fact that his laid off employees can't sue him. According to reports on social media, these employees got a letter from Grant's attorney along with their walking papers. The letter, and we are working to obtain a copy, apparently stated that these employees had no legal rights to sue Cardone Capital. Grant's view on the courts may come back to haunt him when he tries to sue current or former tenants for back rent owed and gets court dates three or four years out.
Cardone is basically screwed with his $1.7 billion AUM at what? 85% leverage? With such enormous debt to service in a pandemic, we'll watch to see how Grant Cardone fares — especially when his investors start calling to get their illiquid cash out of Cardone Capital. Cardone has said his deals are based upon a worst case 15% vacancy rate. Let's see how the number works in this crisis when the 85% occupancy stays high but 50% of the people aren't paying rent. As reported by Bloomberg, private equity firms began 2020 with $1.5 trillion in unspent cash looking for deals. These firms watch highly-leveraged firms like Cardone Capital and can smell fear and weakness light years away.