Developer Rick Caruso is known for his lavish outdoor malls, luxe seaside resort near Santa Barbara and stewardship of USC as chair of the board of trustees. Next up: He's planning to make a splash in cryptocurrency.
In what may be a real estate industry first, bitcoin will now be accepted for retail and apartment rent at the Grove shopping center and other properties owned by Caruso. The Los Angeles real estate magnate is planning other digital efforts such as using blockchain technology to support a new rewards program for shoppers.
One of his first tenants to pay in bitcoin may be Elon Musk, chief executive of Tesla Inc., who operates a store selling Tesla electric cars at Caruso's the Americana at Brand center in Glendale.
Caruso announced Wednesday that his company had invested in bitcoin as part of a partnership with Gemini, a cryptocurrency exchange founded by Tyler and Cameron Winklevoss. The twins gained fame for suing former Harvard classmate Mark Zuckerberg for allegedly stealing their idea for a social network that became Facebook.
As a result of the deal, about 1% of Caruso Properties' treasury is in bitcoin, Caruso said, although he declined to reveal the dollar value.
"I believe it's a good hedge" to diversify the company's finances, Caruso said, "and has already proven to be a good investment for us."
The operator of nine outdoor malls acknowledged that there hadn't been a clamor from tenants to pay rent in bitcoin, but Caruso said he wanted to be prepared as cryptocurrency grew more widely accepted.
The volatile digital asset has appreciated at a furious rate and has reached a point — trading roughly between $50,000 and $60,000 apiece in the last month — where it's seen more as an investment, albeit speculative, than something to spend on everyday expenses such as rent.
Federal Reserve Chairman Jerome Powell last month described bitcoin and its crypto cousins as "not really useful stores of value. And they're not backed by anything." Still, several big banking names, including Goldman Sachs and Mastercard International, have been making cryptocurrency moves.
Caruso compared bitcoin to credit cards, which started in the 1950s as odd rarities before becoming mainstream.