The world's third-richest man sold his New York apartments back to the GP for six cents on the dollar. Sergey Brin is worth more than a quarter-trillion dollars. Last year, quietly, he sold his New York City apartment stake back to the fund manager and ate a near-total loss to get out. Bloomberg and Crain's put it the same way: pennies on the dollar. The firm that bought him out, A&E, says he took six cents. The easy read writes itself. Greedy billionaire flees the city, or rent control claims another landlord. Both miss the part worth studying. Liquidity wasn't the problem. He's the third-richest person alive. So why clear the position at six cents? Maybe he was cutting a forced loss as the fund slid toward foreclosure. Maybe he wanted the write-off against gains somewhere else. Either way, the price two parties put on New York stabilized equity, a motivated seller and the manager who knew the buildings best, came out to six cents on the dollar. And A&E is no sympathetic figure. City officials have called it one of the worst landlords in New York: mold, bedbugs, more than 4,000 violations, a $2.1 million settlement over conditions. Some of that six cents is the company's own mess. But the mess is survivable when the rent can eventually move. A bad building with room to raise rents still finds a buyer at some price. Freeze the rent and you delete the exit that makes patience pay. The number stops pricing the building and starts pricing the rules. Owners have been warning where this goes, and the warning is self-interested, so weigh it accordingly. Equity leaves first. Lenders pull back, and repair budgets shrink to fit the math that's left. A&E is already in foreclosure on dozens of buildings, which is what that warning looks like before it finishes arriving. Whatever finally pushed Brin, the pattern is older than this fight. We pick our policies for what they promise, and meet them again later in what they set loose. https://lnkd.in/eszfzcRP