• For a decade, Canada has been the largest foreign investor in US commercial real estate.
• The billions of dollars that flow into the US from its northern neighbor could now be in jeopardy.
• The rift comes as President Trump has threatened tariffs on Canada and mused of annexing it.

President Donald Trump upended relations with one of the country's closest allies and trading partners when he suggested that the US should annex Canada and threatened punishing tariffs on certain Canadian imports.

The fraying relations between the two nations could also disrupt one of the biggest pipelines of money into US commercial real estate.

Since 2015, Canadian investors have acquired roughly $184 billion of US multifamily apartments, office buildings, retail spaces, industrial warehouses, and other commercial property assets, according to data from MSCI. That's more than any other foreign investor.

There are now worries that Canadian buyers, which include some of the world's wealthiest pension funds, might slow or even postpone US real estate dealmaking.

"There are clients who are Canadian clients who are very upset and their first reaction is if the US can do this to a friend, then we're not going to invest," said Mark Rose, the CEO of Avison Young, a commercial real estate services firm that has its headquarters in Toronto. "I don't think that Canadian investors are running to close deals in the US today."

Gunnar Branson, the CEO of the Association of Foreign Investors in Real Estate, a trade association based in Alexandria, Virginia, that represents foreign buyers, said that during a February conference for the group, he had "never seen so many angry Canadians before."

"If you're a cross-border investor, the US has been a lower political risk jurisdiction," Branson said. "Risk managers are looking and saying: We need to assess that."

Branson said that foreign investment had been broadly diminished in recent past years by a sluggish sales market caused by higher interest rates and uncertain values. The outlook, however, had brightened in recent months, as expectations grew that interest rates would fall and deal activity would accelerate, allowing foreign buyers to reboot US acquisitions.

Foreign investment had already begun to pick up, according to the real estate services company CBRE, which reported that international buyers invested $37 billion during the second half of 2024, a 31% increase from the same period a year before.

Canada led all foreign investment with roughly $4 billion of deals in the second half of the year, according to CBRE, more than double the next closest country, the UK, which purchased $1.62 billion of property assets in the US.

That rebound could now be in jeopardy.

"There is certainly a pause going on," Branson said, referring to both Canadian and foreign investment at large.

CBRE predicted that foreign investment in US property would grow 8% in 2025, but cautioned that "downside risks remain, particularly due to elevated long-term bond yields, potential tariffs and geopolitical uncertainties."

Major Canadian funds could turn elsewhere

Large Canadian pension funds have been major acquirers of trophy US commercial assets. Oxford Properties Group, a subsidiary of the roughly $100 billion Ontario Municipal Employees Retirement System, is a partner in Hudson Yards, an ongoing real estate mega-development on Manhattan's West Side that is one of the country's largest private real estate projects.

Caisse de dépôt et placement du Québec, a pension manager that oversees about $340 billion, owns several prominent real estate assets, including the Manhattan office tower 3 Bryant Park and a majority stake in 1211 Avenue of the Americas.

The arrival of President Trump and his new administration in January has disrupted the global order for commerce and trade — and potentially also the flow of investment.

In March, the US placed a 25% tariff on Canadian goods and energy outside of what is protected by North American free trade agreements. The move included a 25% tariff on Canadian steel and aluminum.

Aside from the painful duties, Trump has inflamed Canadians with remarks that suggested he thought of the country as little more than a US satellite. In March, Trump said during a White House press conference that "Canada only works as a state" of the US.

In late March, Canada's prime minister, Mark Carney, responded, declaring that Canada "will need to dramatically reduce our reliance on the United States. We will need to pivot our trade relationships elsewhere."

The souring relationship has influenced investor decision making, experts say.

"Does the comments coming out of Washington impact real estate trading? Yes, it does," Rose, the CEO of Avison Young, said.

Rose said that the company's Canadian executives were outraged by Trump's remarks and the US's suddenly aggressive economic posture.

Rose said that he has had to personally navigate the fallout by assuaging Canadian employees and clients who "were offended and wanted to know what were we going to say."

He released a public statement in which he said he was "distressed over the impact of actions and commentary emanating from the U.S. toward its ally and neighbor to the north."

"We are here to support our people in North America, all of our clients in North America, no matter what side you come down on," he wrote.

Europe emerges as an alternative

There are some signs that investors may be shifting their focus away from the US.

David Steinbach, the global chief investment officer of the development and investment firm Hines, said that interest has picked up in European investment funds managed by the company.

He said that Hines has recently had "more conversations about our European funds and investments" with global investors and that the company was looking to raise additional capital for an open-ended fund that invests on the continent.

"We do have an unprecedented amount of dry powder for Europe right now," Steinbach said, noting that he believed at the start of the year that global investors would be overwhelmingly attracted to US property markets.

"This year it's going to be a bit more balanced than I originally thought," Steinbach said, referring to the pickup of interest in European deals.

Aaron Bennett, the chief investment officer of the University Pension Plan, a roughly $8 billion system representing Ontario-area college faculty and employees, said he believed the "US will eventually get back to what it was" as a key destination for global investment dollars.

He acknowledged, however, that the trade barriers, dimming economic outlook for the US, and the bellicose rhetoric towards longstanding international allies and trade partners from the White House has prompted investors to consider alternatives.

"The opportunity for diversification in other markets like Europe and others, which was interesting before, becomes more interesting," Bennett said.

On April 2, Trump escalated his reordering of global trade by unveiling sweeping tariffs against dozens of nations.

Few alternatives can compete with the US

There are reasons to believe, however, that global investment into US real estate, which is not directly impacted by trade barriers, might remain robust even in a world where the US faces economic backlash and retaliation for its new policies.

"Does that mean the US is going to get blacklisted? The answer is absolutely not," said Dirk Aulabaugh, the global head of the advisory services group at Green Street. "The US still has the best growth, we still have the most transparency, we still have the most stable government. So there are a lot of things that investors have to check boxes on that the US is still going to be the best."

Sam Tenenbaum, the head of multifamily insights, at the real estate services firm Cushman & Wakefield said that he had recently had a conversation with a Canadian investment firm that was considering a US acquisition. The investor, he said, was bothered by the international tensions between the US and Canada, but would pursue the deal if it made economic sense.

"They're not happy about it, but I wouldn't characterize it as affecting their investment decisions," Tenenbaum said.

• Seth Jones had a real-estate-investing rule: only rent out homes for 1% or more of their value.
• He sold his 10 properties and put the money into an exchange-traded fund portfolio, or ETFs.
• Jones says life is easier without the headaches that come with property management.

This is an as-told-to essay based on a conversation with Seth Jones, 36, who lives in Port Orange, Florida, about 20 minutes south of Daytona Beach. Jones started buying investment properties in 2015, then began selling them off in 2020 to put his money elsewhere. The conversation has been edited for length and clarity.

When I was younger, I read books like "Rich Dad, Poor Dad," and "The Millionaire Real Estate Investor." That's all I wanted to do.

When I left the military at 22, the first thing I did was get a job as a real-estate agent because I thought it would help me become an investor.

My wife and I moved to Port Orange, Florida, in 2013 to be closer to her parents. I quickly realized Florida was saturated with agents. Even back then, there were only a small number of really good mortgage brokers. So I pivoted.

It took some time because I had to develop the right credentials. I became a personal banker with a regional bank and worked there for about a year and a half. Eventually, I became the branch manager. The entire time, I was working on my licensing to become a mortgage broker.

For years, my wife and I were hyper-focused on saving money. My wife is a teacher and we lived only off her salary. All of my income went into saving to buy properties. We hardly ever ate out and never went to bars. My faith is really important to me, so I spent a lot of time around people in the church, which made it easier. A lot of the people in the church live pretty simply, so we didn't do a lot of things socially or travel-wise, either.

The goal was to get to 100 doors. That was my entire focus. I just wanted to build a real-estate business that would eventually support me and my family, and I wanted to do it as fast as possible.

I didn't purchase my first property until 2014. They were actually two, each with three bedrooms under $60,000. I was able to pay 15% down.

I created a rule to guide my real-estate investing strategy

I'm very conservative by nature. Fundamentals have always mattered to me.

It's been frustrating to me that in the aftermath of 2008, a lot of people developed a mindset that real estate just doesn't go down in value.

I developed a rule as a mortgage broker that I often call the 1% rule. It's very simple, back-of-the-napkin math. When I look at a property, the first thing I look for is whether the monthly rent I can charge for it is greater than 1% of the home's value. So on a $100,000 property, am I able to rent it out for $1,000 per month? On a $200,000 property, am I able to rent it out for $2,000 per month?

It's not ironclad and doesn't always make or break a purchase. But I use it as a guidepost and for quick analysis of a deal.

After the first two properties, I was able to grow rather quickly. In 2018, I opened my first mortgage brokerage, which increased my income and gave us more resources to invest with. By 2019, I was able to target higher-quality properties in top school districts.

My tenth and last purchase was a property in Lexington, South Carolina that I bought for $138,000 in February 2020. By that point, I had realized I had been concentrating all my risk in Florida. I started to get worried about the impacts of a big hurricane and wanted to diversify my portfolio out of state.

Doing my research, western South Carolina seemed fairly insulated from national disasters and I found a good school district in Lexington.

I ended up with a 10-property portfolio.

The COVID real-estate boom worried me and I got out

In the real-estate investing world, everyone used to talk about cash flow.

Sometime around 2019, I noticed a shift in focus. I listen to a lot of financial podcasts and I heard everyone's focus change from cash flow-oriented to appreciation-oriented. That's just never how I've looked at underwriting deals.

At the beginning of COVID, I anticipated property values were going to be stressed and would potentially go down. Obviously, the opposite happened.

I watched things take off. I wasn't sure what was going to happen moving forward, but the fundamentals started to change. I used Reventure, a data aggregator for real estate, pretty extensively. It pulls in data from a lot of different sources, and I would track price-to-rent ratios for the local market.

For property values, I've used every website, but I prefer Redfin. I find it to be the most accurate, and I like the feature where you can see comparable sales.

I sold two properties in 2019, three in 2020, three in 2021, one in 2022, and one in 2023. The biggest appreciation was a home I purchased for $190,000 that I was able to sell for $500,000.

I put all our resources into liquid assets — a diversified, multi-asset ETF portfolio of fundamentally sound stocks (SCHD), gold (IAU), long-term treasuries (SCHQ), and short-term treasuries (SCHO).

I have no regrets, and I think that I'll be vindicated once we have some type of correction.

I have people who tell me I'm an idiot for selling off my properties. They think they could've made 10 times what I did in real estate.

I do think real estate is a great tool to build wealth, but it's also true that fundamentals matter. There's a significant difference in my headspace coming from not owning real estate. From a liability perspective, I have no external worries. No one's going to get hurt. I'm not dealing with late-night phone calls.

There is still stress in trading stocks and equities. You don't see a ticker on a house going up and down all the time, but life is way simpler.

• Monaco is the world's most expensive place to buy luxury housing.
• The 2025 Knight Frank Wealth Report says $1 million buys just 205 sq ft of prime residential property.
• The tax haven is tiny and densely populated, so there's very little space to build on.

A million dollars will only buy you about as much space as a parking spot in Monaco.

That's according to this year's Knight Frank Wealth Report, which found that $1 million will buy just 19 square meters, or about 205 square feet, of prime residential property in the microstate on the French Riviera.

In comparison, the same amount would get you 34 square meters (about 366 square feet) in New York — the world's sixth most-expensive market for luxury real estate.

Hong Kong is ranked second, followed by Singapore, Geneva, and London.

Monaco remains a magnet for the superrich due to its lack of income or capital gains taxes, along with its favorable climate and high-quality healthcare.

However, housing costs are exceptionally high. Monaco was also the world's most expensive luxury rental market last year.

A Knight Frank analysis from May 2024 found that renting a 1,100-square-foot property in Monaco starts at about $19,350 a month. A $30,000 budget would likely only stretch to a modest two-bedroom apartment.

Monaco's extreme property prices are driven by a lack of space to build more properties, resulting in a limited housing supply.

At just 510 acres, Monaco is the world's second-smallest sovereign state after the Vatican City.

For perspective, the constitutional monarchy is smaller than New York's Central Park, which covers 843 acres, while the entire city spans about 200,000 acres.

According to the latest World Bank data, Monaco is also the most densely populated country, with 18,681 people per square kilometer.

To address the space constraints, Monaco has been reclaiming land from the sea for decades. In 2019, Savills said it was investing more than $2 billion to extend Monaco's coastline by a further 15 acres, creating homes for about 1,000 people.

• Trump's first month stunned Washington and the world, but not those who knew him in real estate.
• The president's unpredictability and chaotic style are familiar to industry executives.
• Trump's second term has generated optimism in commercial real estate — which may now be fading.

President Donald Trump's first month has been a head-spinning whirlwind of seemingly contradictory policy moves and zig-zagging alliances that have disoriented adversaries and allies alike.

Take Friday's on-camera shouting match between Trump and Ukrainian President Volodymyr Zelenskyy, which appeared to derail a deal for the US to extract minerals from Ukraine and scuttle peace talks the US had been trying to arrange with Russia.

Trump has expressed interest in taking over Canada and Greenland and has floated support for Gaza to be transformed into a resortlike area devoid of Palestinians, stoking anger in the Arab world. The president, meanwhile, hit Mexico and Canada with tariffs, reversing course when the stock market teetered, only to then impose trade barriers.

While Trump's brand of seemingly stream-of-consciousness decision-making and rapid-fire flip-flopping have sent shockwaves across Washington and the world, they're more familiar to those who knew him as a New York City real estate dealmaker in the decades before his political rise.

Manhattan real estate executives and attorneys who worked with him when he was active in the business in the 1980s, 1990s, and 2000s said his chaotic style was well known — and less out of the ordinary — in an industry infamous for its backstabbing and big personalities.

An attorney who worked with Trump in the '90s said that many developers in the city reflexively entered into business negotiations with a pugilistic mindset framed by the assumption that contractors, vendors, or other counterparties were overcharging or outmaneuvering them — or attempting to.

Trump, he said, was part of a smaller subset of landlords who took that a step further by freely renegotiating deals and contracts after the fact. He was also known as mercurial and combative, the person said.

"Most high-end real estate developers, high-quality real estate developers, didn't want to do joint ventures with him because of a reputation that if you had disagreement with him, then you're in a guerilla war," the attorney said. He was granted anonymity because of his client relationship with Trump, though he did not discuss specific business dealings or work that he had done with him.

Another real estate lawyer who worked with Trump on a large retail lease in Manhattan also remembered him as characteristically unpredictable.

"It's hard to know where he is going to end up and what he's going to do," the attorney said. "Some people, you can make some estimate: 'I've dealt with him a lot of times before. He is going to do this; he's going to do that.' I think Donald is harder to gauge that way."

The attorney, who also spoke on condition of anonymity to avoid speaking publicly about a president who has shown vindictive urges, said that Trump displayed his typical bravado during the deal they did.

"It was the best building in the best location and the best city and the best block," the attorney said. "It was all of it."

A streak of failures

Some executives said they hoped that Trump had evolved from his days in real estate and business, in part because of a streak of failures, including the bankruptcies of casino resort projects he developed in New Jersey's Atlantic City in the '80s and '90s.

"Several of his projects went bankrupt, and I'm sure he is not going to get everything right going forward either as president," said Arthur Mirante, a vice chair at the real estate services firm Savills. "So let's hope that whatever mistakes he makes, they're in areas that don't do a lot of damage to us."

Earlier in his career, Mirante was the CEO of Cushman & Wakefield, which handled leasing work at 40 Wall Street, an office building in lower Manhattan owned by Trump's real estate firm, the Trump Organization.

Mirante said he remembered Trump for admirable qualities, such as a "maniacal attention to detail" and his punctuality. As a real estate executive, Trump would sometimes tour his buildings on the weekend, he said.

"He'd point out dirt in the corners, or he'd point out metal that hadn't been polished appropriately," Mirante said of such visits to 40 Wall Street. "And that's a real asset when you're an investor and a developer and a buyer."

Trump showed less focus on the homework that was sometimes necessary to evaluate the progress or strategy of a real estate investment, according to a real estate executive who co-owned property with him. The executive said Trump often wouldn't read investment updates and financial documents that were sent to him and was dim on the details until they were explained to him verbally.

"He'll call you up and go through it. He's a visual learner," the executive said. The person didn't want to be identified disclosing private discussions he had had with Trump years ago. "He wants to talk through things and explain things, and he gets it," the executive added. "Obviously, he's a very confident guy, but he's not stupid by any means."

Those tendencies have carried over to his presidency. Trump famously didn't read intelligence briefings during his first term. In Friday's argument with Zelenskyy, he sparred with the Ukrainian leader over when Russia invaded Crimea, wrongly saying that it took place in 2015 when, in fact, it was 2014.

Fading optimism

Trump stoked widespread optimism in the commercial real estate industry when he returned to the White House with a pro-business agenda to cut interest rates, reduce regulation, and stoke the economy.

He also tapped real estate veterans to fill senior positions in his administration, including Steve Witkoff, his special envoy to the Middle East and a key official involved in negotiations with Russia, and Howard Lutnick, who was appointed commerce secretary.

But a dizzying month of tariff actions and threats, an advancing plan to extend $4.5 trillion of tax cuts for another decade, and a reordering of bedrock American alliances and policies on the world stage have raised worries for the sector.

Tariffs and tax cuts could put upward pressure on long-term interest rates, which could hurt the health of the debt-dependent real estate business. Cooling relations with long-standing American allies like Canada and Europe and the embrace of adversaries like Russia, meanwhile, could influence global security and the flow of international investments that feed domestic economic activity and real estate dealmaking.

A senior real estate executive labeled Trump's decision-making on tariffs and tax cuts "kamikaze economics." He said he worried that prices could rise for steel, aluminum, and lumber, critical materials for real estate development. He added that he was concerned Trump's tax extension would increase the nation's $36 trillion debt and drive up long-term interest rates, which serve as the benchmark for most loans in the sector. The new administration's plans to deport millions of immigrants who do not have legal status to remain in the country, meanwhile, could affect the labor pool and push up wages and construction costs.

"It's super inflationary," the executive said.

The law firm Seyfarth Shaw recently released an annual sentiment survey for the real estate industry that could be used as a gauge for its warmth toward the Trump administration.

James O'Brien, a Washington, DC, partner at the firm, said that the survey registered the most optimism from the sector in five years. Eighty-seven percent of respondents said they thought 2025 would be a buoyant year for the real estate business.

He noted, though, that the poll was taken from January 14 to January 27, a period that corresponds to before and just after Trump's swearing-in on January 21 for his second term.

O'Brien said the turbulence of the past month may have shifted feelings negatively. The survey found that the real estate industry's greatest concerns were, in order of priority, interest rates and the cost of capital, construction costs, and inflation.

"If you look at those things, and then you look at some of the policies that the administration is rolling out and talking about, a lot of the policies are going to negatively impact these areas of greatest concern," O'Brien said. "So that would be a drag on optimism."

• Business partners Kevin Hart and Mike Gorius have built a robust and diverse real estate portfolio.
• Their strategy involves flipping and wholesaling for cash and holding rentals for long-term gains.
• Their advice to new investors is to start with a flip to bring in cash and then expand to rentals.

Kevin Hart started thinking about real estate as a viable business in college when he was renting a duplex with his fraternity brothers.

"We had both sides, there were 10 guys, and we were all paying 500 bucks a month to this landlord," the University of Kentucky grad told Business Insider. It seemed like a relatively simple way to bring in thousands of dollars a month, "so I always had that in the back of my head."

He graduated, started a career in accounting, and found his mind wandering as he sat in his cubicle all day "mindlessly sending spreadsheets," he said. "I was daydreaming about real estate or other businesses, thinking, 'How do I get out of here?'"

His curiosity led him to websites like BiggerPockets. He learned about various investing strategies, "but I put real estate on the back burner because I just thought it was too hard to get started. I didn't have any money and didn't think I could do it."

A career pivot to insurance in 2017 ended up putting Hart in the red. He started working as an independent contractor for State Farm and took out a business loan to help with marketing expenses.

The one major silver lining was that it introduced him to home flippers in his area in Louisville.

"They were clients of mine on the insurance side and motivated me to flip a house and see if it's really for me," said Hart. "I started working with some local wholesalers, found a good deal, and bought this first house with $8,000 down using a hard money lender. My wife was super freaked out about what I was doing because I'd never done it before. Luckily, it went really well."

He said he and his first business partner bought the property for about $70,000 in March 2019, put roughly $40,000 of work into it, and sold it for around $160,000.

"Together we split probably $30,000 of profit," said Hart. He was hooked, bought two more flips before the end of the summer, and quit his job later that same year. "I had these paychecks coming in that were triple what I was paying myself at State Farm as a self-employed insurance agent. That was super exciting."

Hart's current business partner, Mike Gorius, took a different approach at the beginning of his real estate career, which began as a side project to help alleviate credit card debt and car loans. He started by purchasing a duplex in Louisville, despite living in Phoenix at the time, and turned it into a long-term rental.

"I spent about $35,000 on the down payment of my own money. When I got my first rental check, the profit was like $400," said Gorius, who worked in sales and recruiting throughout his corporate career. "I remember thinking, 'Oh man, it's going to take a lot of $35,000 down payments for me to retire off this."

Gorius and Hart, who initially connected when Gorius was looking to buy in the Louisville market, have been doing deals together since 2022. They formed an official business partnership in 2024 under the Joe Homebuyer franchise and, in their first full year working together, did 50 transactions between wholesales, wholetails, and flips. They also own more than 20 rental properties, including short-, mid-, and long-term, in the Lousiville area. BI verified their property ownership and deal history by looking at settlement statements and closing documents.

Thanks to real estate, Hart says he's completely rid of bad debt, and Gorius, who quit his corporate job in 2023 to work in real estate full-time, expects to have paid off his in 2025.

"There's not much else out there where you can make lump sum checks to help you pay off that debt," said Hart. "It's a good business to help you build your savings account."

Their next major milestone is financial freedom and the option to never have to work for income again, though they're not the types to be on the golf course five days a week. They said the flexibility is more intriguing.

A two-pronged wealth-building strategy: Flip to bring in cash, then buy and hold rentals

Hart and Gorius have narrowed in on a real estate strategy that works for them — and they encourage new investors to use a similar approach: Start with a flip for a cash infusion and then use that money to buy and hold rentals.

"If you have 10 grand you can typically go find a deal, put the down payment down, and hopefully you're making $15,000 to $30,000. That's a quick capital boost to help you get going," said Hart. "If you start flipping a few houses a year, whether you've got a W2 or not, that's definitely going to put you in the right direction to be able to do other things like buying rentals."

It's easier said than done.

A common and costly mistake in the flipping world is going with the first contractor you find, rather than interviewing a few.

"Try to get referrals from other flippers. That way, hopefully, you're not getting burned on a bad contractor," said Hart. "You definitely don't want to hire the cheapest one you find. They're probably cheap and available for a reason."

Another rookie mistake is taking on too big of a project. You don't want to be gutting the house or moving walls on your first flip. Instead, start with more of a cosmetic flip where you're updating the flooring, paint, cabinets, and light fixtures.

"In reality, if you're doing a lot of flips, flipping is a pretty boring business. You're using the same paint colors, you're using similar flooring. Whatever's in style that year, we're like, 'Okay, for the next five houses, this is what we're doing,'" said Hart. "We're doing neutral colors, neutral floors, and just making everything fresh and clean so that it appeals to the most amount of people possible."

The money coming in from their flips and wholesales funds their lifestyle and savings.

"Flipping and the wholesaling, that's what I love to do. That's my day job, so I've turned that into my 'salary,'" said Gorius — and it can be lucrative.

He cited their most recent deal: "We got a property under contract 16 days ago, closed on it today, and wholesaled it for $24,000. Because it's a wholesale, that's pretty much gross profit. That's an extreme case. That's a fantastic deal. I will say there are other deals and flips that have been in our pipeline for two, three months now, so they're not all like that. But that is the power of this business."

A successful flip or wholesale can help you build enough savings to start adding rental properties to your portfolio. The problem with starting with a long-term rental is that it likely won't generate much cash flow, if any. In their market, for example, they can profit about $100 to $200 a month per unit.

"If you don't have any money in the bank and a tenant calls you because the water heater went out, there goes a whole year of your cash flow," said Hart. "You really have to be prepared to be able to make these repairs."

They look at their long-term rentals as their retirement funds.

"They probably won't make a ton, if any, money in the short term, but if you hold it for that 20, 30 years, then that's your retirement plan," said Gorius.

As Hart put it: "Buying rental properties is like a slow burn to retirement. No one is getting super wealth immediately, especially not in Louisville." But over time, "The tenants pay the mortgage, we build equity every single month, and eventually, we can sell off and have a nice retirement plan with it."

• A billionaire couple won a refund for a moth-infested London mansion they bought in 2019.
• The buyers accused the seller of concealing the moth infestation.
• A High Court judge ordered the seller to refund much of the cost of the house as well as damages.

A judge ordered a refund for a billionaire couple who paid £32.5 million (about $40 million) for a mansion with a "severe moth infestation."

A UK High Court judge ruled that Iya Patarkatsishvili, daughter of the Georgian billionaire tycoon Badri Patarkatsishvili, and her husband Yevhen Hunyak, can hand the home back to the seller, the property developer William Woodward-Fisher.

Patarkatsishvili and Hunyak purchased Horbury Villa in Notting Hill, west London, in May 2019. However, the judgment states that within days of moving in, they started noticing moths flying around and landing on their cutlery.

The couple found moths in clothes, wine glasses, and toothbrushes and swatted away hundreds a day, the judgment stated.

Pest control companies found that insulation in the ceiling was the source of the issue. The works to replace the insulation cost £270,000, the hearing heard.

The claimants accused Woodward-Fisher of knowingly selling the house with the moth infestation. He was found to have known about the issue since early 2018 but failed to inform Patarkatsishvili and Hunyak.

Woodward-Fisher told the court he had been informed that moths were not vermin and "therefore not relevant to this inquiry."

The judge ruled that Patarkatsishvili and Hunyak should be refunded much of the house's cost, minus £6 million for the time they lived there, plus substantial damages. Woodward-Fisher was ordered to pay the couple £4 million in damages, including £15,000 for their moth-damaged clothes and £3.7 million they paid in stamp duty.

Chris Webber, an attorney at the firm Squire Patton Boggs who represented Patarkatsishvili and Hunyak, said the couple "hope the case will serve as a warning to unscrupulous property developers who might seek to take advantage of buyer beware to sell properties by concealing known defects," The Guardian reported.

Patarkatsishvili is a theater director. Her father, who died in the UK in 2008, was once Georgia's richest man worth $12 billion, per Forbes. Some of his assets passed to Patarkatsishvili.

Woodward-Fisher is a former rower who competed for the UK in the 1970s.

Horbury Villa was built in the mid-1800s and spanned 2,800 sq ft. After being extended, the property covered 11,000 sq ft and featured a pool, spa, cinema and gym in the newly created basement, according to the website of architect Anthony Paine.

• OpenAI and the White House have accused DeepSeek of using ChatGPT to cheaply train its new chatbot.
• Experts in tech law say OpenAI has little recourse under intellectual property and contract law.
• OpenAI's terms of use may apply, but are largely unenforcible, experts say.

This week, OpenAI and the White House accused DeepSeek of something akin to theft.

In a flurry of press statements, they said the China-based upstart had bombarded OpenAI's chatbots with queries, hoovering up the resulting data trove to quickly and cheaply train a model that's now almost as good.

The Trump administration's top AI "czar" said this training process, called "distilling," amounts to intellectual property theft. OpenAI, meanwhile, told Business Insider and other outlets that it is investigating whether "DeepSeek may have inappropriately distilled our models."

OpenAI is not saying if the company plans to pursue legal action, instead promising what a spokesperson termed "aggressive, proactive countermeasures to protect our technology."

But could they? Could they sue DeepSeek on "you stole our content" grounds, much like the grounds OpenAI was itself sued on in an ongoing 2023 copyright claim filed by The New York Times and other news outlets?

Business Insider posed this question to experts in technology law, who said challenging DeepSeek in the courts would be an uphill battle for OpenAI, now that the content-appropriation shoe is on the other foot.

OpenAI would have a hard time proving an intellectual property or copyright claim, these lawyers said.

"The question is whether ChatGPT outputs" — meaning the answers it generates in response to queries — "are copyrightable at all," said Mason Kortz of Harvard Law School.

That's because it's unclear that the answers ChatGPT spits out qualify as "creativity," he said.

"There's a doctrine that says creative expression is copyrightable, but facts and ideas are not," explained Kortz, who teaches at Harvard's Cyberlaw Clinic.

"There's a huge question in intellectual property law right now about whether the outputs of a generative AI can ever constitute creative expression or if they are necessarily unprotected facts."

Could OpenAI roll those dice anyway, and claim that its outputs actually are protected?

That would be unlikely, the lawyers said.

OpenAI is already on the record in the New York Times copyright case arguing that training AI is an allowable "fair use" exception to copyright protection.

If they do a 180 and tell DeepSeek that training is not a fair use, "that might come back to kind of bite them," said Kortz. "DeepSeek could say, 'Hey, weren't you just saying that training is fair use?'"

There's arguably a distinction between the Times and DeepSeek cases, Kortz adds.

"Maybe it's more transformative to turn news articles into a model" — as the Times accuses OpenAI of doing — "than it is to turn outputs of a model into another model" as DeepSeek may have done, Kortz said.

"But this still puts OpenAI in a pretty tricky situation with regard to the line it's been towing regarding fair use."

A breach of contract lawsuit is more likely

A breach-of-contract lawsuit is much likelier than an IP-based lawsuit, though it comes with its own set of problems, said Anupam Chander, who teaches technology law at Georgetown University.

The terms of service for Big Tech chatbots like those developed by OpenAI and Anthopic forbid using their content as training fodder for a competing AI model.

"So perhaps that's the lawsuit you might possibly bring — a contract-based claim, not an IP-based claim," Chander said.

"Not 'you copied something from me,' but that you benefited from my model to do something that you were not allowed to do under our contract."

There's a possible hitch, Chander and Kortz say. OpenAI's terms of service require that most claims be resolved through arbitration, not lawsuits. There's an exception for lawsuits "to stop unauthorized use or abuse of the Service or intellectual property infringement or misappropriation.

There's a larger hitch, though, experts say.

"You should know that the brilliant scholar Mark Lemley and a coauthor argue that AI terms of use are likely unenforceable," Chander said. He was referring to a January 10 paper, The Mirage of Artificial Intelligence Terms of Use Restrictions, by Stanford Law's Mark A. Lemley and Peter Henderson of Princeton University's Center for Information Technology.

To date, "no model creator has actually tried to enforce these terms with monetary penalties or injunctive relief," the paper says.

"This is likely for good reason: we think that the legal enforceability of these licenses is questionable," it says. That's in part because model outputs "are largely not copyrightable" and because laws like the Digital Millennium Copyright Act and the Computer Fraud and Abuse Act "offer limited recourse," it argues.

"I think they are likely unenforceable," Lemley told BI of OpenAI's terms of service, "because DeepSeek didn't take anything copyrighted by OpenAI, and because courts generally won't enforce agreements not to compete in the absence of an IP right that would prevent that competition."

Lawsuits between parties in different nations, each with its own legal and enforcement systems, are always tricky, Kortz said.

Even if OpenAI cleared all the above hurdles and won a judgment from a US court or arbitrator, "in order to get DeepSeek to turn over money or stop doing what it's doing, the enforcement would come down to the Chinese legal system," he said.

Here, OpenAI would be at the mercy of another extremely complicated area of law — the enforcement of foreign judgments and the balancing of individual and corporate rights and national sovereignty — that stretches back to before the founding of the United States.

"So this is, a long, complicated, fraught process," Kortz added.

Could OpenAI have protected itself better from a distilling incursion?

"They could have used technical measures to block repeated access to their site," Lemley said. "But doing so would also interfere with normal customers."

He added, "I don't think they could, or should, have a valid legal claim against the searching of uncopyrightable information from a public site."

Representatives for DeepSeek did not immediately respond to a request for comment.

"We know that groups in the PRC are actively working to use methods, including what's known as distillation, to try to replicate advanced U.S. AI models," OpenAI spokesperson Rhianna Donaldson told BI in an emailed statement.

"We are aware of and reviewing indications that DeepSeek may have inappropriately distilled our models, and will share information as we know more," the statement said. "We take aggressive, proactive countermeasures to protect our technology and will continue working closely with the US government to protect the most capable models being built here."

• OpenAI said it was investigating whether DeepSeek inappropriately used its AI outputs.
• DeepSeek built AI models using less-advanced chips at a fraction of the cost of US rivals.
• "We take aggressive, proactive countermeasures to protect our technology," OpenAI said.

OpenAI is investigating whether DeepSeek inappropriately trained its powerful AI models using the US startup's technology.

A spokesperson for OpenAI said the company was reviewing the matter closely and would take "aggressive, proactive countermeasures" to protect its AI models from improper use.

"We know that groups in the PRC (People's Republic of China) are actively working to use methods, including what's known as distillation, to try to replicate advanced US AI models," the spokesperson wrote in an email. "We are aware of and reviewing indications that DeepSeek may have inappropriately distilled our models, and will share information as we know more."

DeepSeek built top-performing AI models using less-advanced chips at what it says is a fraction of the cost of rivals such as OpenAI, Google, and Meta. The news has hammered some tech stocks this week and put a big question mark over massive spending on AI chips and related infrastructure.

It's a particular challenge to OpenAI because DeepSeek's models are priced way below the US startup's offerings.

OpenAI lets developers with a valid license integrate its proprietary models into their own applications. Its terms of use, however, prohibit developers from using outputs from its models to develop any models that directly compete with its products and services.

David Sacks, the White House's artificial-intelligence and crypto czar, told Fox News it was possible that DeepSeek had engaged in intellectual property theft.

"We take aggressive, proactive countermeasures to protect our technology and will continue working closely with the US government to protect the most capable models being built here," the OpenAI spokesperson told BI on Wednesday.

Citing people familiar with the matter, Bloomberg reported on Tuesday that Microsoft notified OpenAI that its security researchers in the fall had observed individuals they believed may be affiliated with DeepSeek siphoning a large amount of data using OpenAI's application programming interface, or API.

• Erik Buhrow bought a home in Japan for $26,000 while he was still living in the US.
• Buhrow, who grew up in Japan, plans to return at some point when his career is over.
• In the meantime, he plans to rent out his home to the Americans looking to move to Japan.

This as-told-to essay is based on a conversation with Erik Buhrow, who bought a house in Japan's Niigata Prefecture through AkiyaMart, a site that helps foreigners buy abandoned Japanese homes known as akiyas. Buhrow, 39, runs a construction business outside Minneapolis.

A lot of people born and raised in Minnesota stay here forever. I've only been here about 10 years.

It can feel like anybody who has any sort of money bought a cabin in northern Minnesota back in the day — when you could. Now, if you want to buy a cabin up north, you're spending $300,000 for a starter shack in the tundra.

Would I rather spend $300,000 on a cabin in northern Minnesota or $30,000 for a cabin in Japan — a country I'm from, I'm accustomed to, and I actually enjoy going to?

I purchased an akiya in Japan this year. I closed on it in July and I did everything remotely over the course of three months.

I did not visit Japan to see the house or do anything. I worked with a real-estate agent who went there and FaceTimed me. Because I'm in construction and I am used to Japan, I was like, "Yeah, I'm willing to pull the trigger without going there."

It's roughly 3,000 square feet and about 150 years old. The Japanese would classify it as eight bedrooms, but I would classify it as six. There are two extra rooms that they would consider bedrooms, but because of their lack of closets, I'm going to call them bonus rooms. There's a two-car garage, one bathroom, and multiple really open living room spaces in an old-school style.

All in with the taxes and the real-estate fees and everything, it was $26,000.

A lot of people say, "The prices are really good, but the insurance and the taxes are going to get you." They don't. My insurance for $200,000 of replacement costs me a little under $500 a year. I actually bought five years' worth of home insurance at once.

My taxes are $183 a year. In Japan, homes over 22 years old are depreciated, so that $183 is just on the land. There's no tax on the house because it's ancient.

I own my home in Burnsville, Minnesota. It's very similar — 3,000 square feet, a garage. I bought it in 2017 for $300,000, and my taxes have gone — from 2017 to now — from $3,000 a year to about $5,000 a year.

I may be a little bit cavalier about the situation. I knew that no matter how bad the house is, it's nothing that I haven't seen. I just felt like, if I don't go visit it, but it's in the location that I want, that's what real estate is about. That's what these houses are really about. You can fix things, you can make the house better or worse, but you can't move it.

I grew up in Japan and long to move back for retirement

I grew up in Japan, so it helped make the decision easier. I grew up on a US military base in Misawa, Japan, in the Aomori Prefecture. My mom was a government teacher, so I lived there for an extended amount of time.

I officially moved to the United States when I went to college. But when I grew up in Japan, I had a huge desire to own property there, but it was always seen as impossible. My mom, my sister, and my brother-in-law, who's half Japanese, just always accepted it as something you can't do — that it's too complicated, or you have to get residency.

I reached out to AkiyaMart for a consultation. They pitched me on being the pilot person for their buyer program. I think it worked out perfectly.

My biggest aim was to be surrounded by the culture of Japan. I grew up on a military base, so I know what it's like to be around foreigners in Japan. Tokyo and Osaka are very tourist-driven, and it can be really difficult to learn the language and truly learn the customs.

The Sea of Japan, or western, side of the country is known for not being very heavily touristed or westernized. The house I bought is on the southern portion of the Tohoku region of Japan. You still get snow, but the architecture as you get further south in Japan gets to be, in my opinion, more beautiful. You have tile roofs and things of that nature. If you go north, you get more flat metal roofs.

Because I'm in construction, I care about home design. So this was a beautiful in-between spot where I could enjoy a southern-style home, but in a snowy northern climate, and also still be close to Tokyo.

The closest city-slash-train stop for the bullet train is 20 minutes away. I can hop on the bullet train and be in Tokyo 90 minutes later.

The prices in that area are lower because it is more remote. It allows you to explore in this adventure of buying a foreign property without having to spend hundreds of thousands of dollars.

I plan to rent out my akiya to other Americans weighing moves to Japan

I'm also in the process of buying another akiya property two minutes down the street. The original premise to buy the second home is based on my sister and brother-in-law, who both grew up in Japan.

In the meantime, I'm hoping that I can turn the second home into a long-term-stay place. I can allow people thinking about doing the same thing that I'm doing to stay there one to three months while they try and figure out is this something that might be a fit for them.

Because people are curious and they're interested in living in Japan, but they don't know if it would work. Somebody could go, "Hey, Erik, I want to stay in your house for a month, use your car, use your Wi-Fi, and figure out if this area fits my goals."

Or maybe my renters will want to work remotely in Japan for an extended amount of time.

My life goal would be to retire in Japan. However, because of visas and complications, it's not that easy.

I look at buying the akiyas as a new adventure in life, a new chapter. If you're not continuing to write new chapters in your book, then it gets kind of boring to read.

• Commercial real estate sales star says data from his 40-year career is key to unlocking the power of AI.
• Bob Knakal has sold $22 billion of property, making him one of America's most successful brokers.
• He says he was fired by property giant JLL in February 2024. Now, he plans a career revival.

Bob Knakal climbed to the top of the commercial real estate sales business by focusing not on billion-dollar Manhattan skyscrapers, but on the tens of thousands of ordinary apartment buildings and land sites across New York City.

Now, the 62-year-old sales executive is adding a new approach by using artificial intelligence.

He says his new sales firm, BKREA, will harness property data and market observations that he has meticulously collected since the mid-1980s and couple it with the blooming powers of AI.

Using the much-heralded technology, Knakal believes he can compete with far larger real estate services companies with only a handful of employees. BKREA presently employs 15 workers and Knakal doesn't imagine getting much larger.

"The extent to which the world is going to change over the next five years is going to blow away what's happened over the last 40," Knakal said. "Realizing that, the first thing I did when I started the new firm – my first hire was an AI guy."

Many commercial real estate firms and professionals have begun to use AI – or have plans to — in order to gather market insights and sort through mountains of data, produce promotional and marketing materials, and help organize and manage client relationships and outreach.

Knakal says he believes his firm can harness the technology more effectively in its niche because the quality and consistency of his data is better than those of rivals.

Although New York City's property records are available to all online, Knakal has gathered reams of proprietary observations over the years, including nuanced information that is often not public. A rental apartment building slated for demolition and redevelopment, for instance, may have had holdout tenants that compromised its value. A vacant land site, meanwhile, may have an access agreement with its neighbor that would allow construction work to proceed more smoothly, enhancing its price tag.

If "you're putting bad data in, you're getting bad data out," Knakal said, adding that he spent three years during the pandemic "personally verifying 2,417 development site sales in the city" to further glean such insights.

"So how do I compete with the big firms?" Knakal asked. "Show me even one of them that's had the same head of research for 10 years."

Tenure at JLL

If Knakal, whose outward demeanor comes across as perpetually sunny, seems slightly irked by some of the big corporate real estate firms that dominate the nation's commercial property sales and services businesses, that's because he is.

Knakal built his career largely outside of that world, founding the small brokerage company Massey Knakal in 1988 with business partner Paul Massey. In subsequent decades, the pair grew the company into one of New York City's largest and most prolific property sales firms. In late 2014, the two men sold the 250-person business to the global commercial real estate company Cushman & Wakefield for $100 million.

Knakal joined Cushman as part of the sale, but left in 2018 for the rival corporate real estate services giant JLL.

Knakal's tenure at JLL came to an end in February 2024 when he was abruptly fired.

Recounting his exit, he said that he had been a guest on CNBC early that month to discuss the property market with the news anchor Brian Sullivan. He was subsequently warned by a person from JLL's marketing department that such media appearances first required company approval. Knakal said he explained to the person that his employment contract offered him "unfettered access to the press."

Shortly after, Knakal was the subject of a weekend profile in The New York Times. On Monday, he said he received a call from a JLL executive requesting an urgent meeting. Knakal sat down with the executive in a conference room in JLL's Manhattan office.

"As soon as I walked into the room, the head of HR walked in," Knakal said. "I knew I was being fired."

Knakal said his dismissal capped off what had been "the dark ages of my career."

"I don't think they appreciated what I brought to the table," he said.

A JLL spokesperson said: "We thank Bob for his contributions to the firm and wish him all the best in his future endeavors."

Massey, who also departed Cushman in 2018 and remains close with Knakal, said that while Knakal was one of the "most upbeat people" he knows, he had become "honest about how he was feeling: he wasn't having as much fun" in the commercial real estate business.

A desire to adapt and compete

BKREA mixes in analogue elements as well. In his new office on West 36th Street is an enormous printed map of Manhattan below 110th Street on the west side and 96th Street on the east to the island's southern tip. Propped across 8 tables, the 24-foot-long, 8-foot-wide printout details 27,649 commercial buildings and development sites in a way that both conveys the immensity of the market but is also more comprehensible to the senses.

Seth Samowitz, a 30-year old data expert who Knakal hired earlier this year to spearhead BKREA's AI efforts, said that he first thought having the giant map in an overwhelmingly digital world was "crazy." He has since come around.

"Honestly, it's the best marketing tool in the entire world," Samowitz said.

Knakal said he has used the map as a key prop in pitching his services to 26 clients so far. "I've gotten 26 exclusives."

Currently, he has been hired to sell about $2 billion of property assets, his largest pipeline in years. Knakal said he has sold 2,342 properties totaling about $22 billion over his career, more than almost any other broker in the country, he believes.

James Nelson, 49, now head of tri-state investment sales at Avison Young, began his career at Massey Knakal in the 1990s. He considers Knakal a mentor, saying that he admires Knakal's hunger to continue to adapt, innovate, and compete.

"Bob talks about what he's going to be doing in 10, 20, 30 years and it's being a broker," Nelson said. "He enjoys the process and the thrill of the hunt."

OpenAI has never revealed exactly which data it used to train Sora, its video-generating AI. But from the looks of it, at least some of the data might’ve come from Twitch streams and walkthroughs of games. Sora launched on Monday, and I’ve been playing around with it for a bit (to the extent the capacity […]

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