When it comes to the fair value of assets, especially cash-flow generating real estate, few are as qualified to opine as the man dubbed “World’s Richest Restaurateur”, billionaire Tilman Fertitta, chairman of Landry's Restaurants which counts among its properties such brand names as Morton’s, Rainforest Cafe, Bubba Gump Shrimp Co., McCormick & Schmick’s, Saltgrass Steak House, Claim Jumper, Chart House, The Oceanaire, Mastro’s Restaurants, Vic & Anthony’s Steakhouse and many more.
Which is why his dire warning about the state of the "crazy" US real estate market, which he believes set for an imminent crash, are likely worth keeping in mind as all the panglossian permabulls see nothing but a 4th dead housing cat rebound ahead. That, and his take on inflation: "There is huge inflation going on right now."
From his interview on Bloomberg TV yesterday:
Fertitta: You are seeing crazy numbers from real estate. You are seeing it New York probably more than anywhere else; you are seeing it in Texas; you are seeing it in California. History always repeats itself, but I think it's going to repeat a little sooner this time. You see it coming.
Q. You smell a crash in the real estate market?
Fertitta: Absolutely I do. I can see it in Houston right now.
Q. It's going to be 1986 all over again?
Fertitta: Absolutely. It didn't come back in Texas until 1996, it took 10 years for it to happen in Texas.
For all those who see nothing but blue skies from falling crude prices, here is Fertitta's contrarian view: "Oil needs to hit $50/barrell for it to cause a total crash."
Finally, for the deflation truthers, here is what Fertitta had to say about inflation:
Ben Bernanke was at Rich Handler's house and he says "there' no inflation." Well go buy something, whether at the grocery store, the drug store, the broom and mop store, and there is inflation everywhere. I have so many types of businesses so I buy everything from labor, to mops, to food, to shrimp, to stake and everything is more expensive. We are raising prices: that's why right now you pay more for an airline ticket, you pay more for a hotel room, you pay more for a pot of coffee. There is huge inflation going on right now.
Somehow we doubt he will appear on CNBC any time soon.