Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast.
Speaker 1: I'm Tracy Alloway.
Speaker 2: And I'm Joe Wisenthal.
Speaker 1: Joe, have you ever been to the Highland Shopping Mall
Speaker 1: in Austin?
Speaker 2: Absolutely, that's a debt. Is it still there? That's like
Speaker 2: the one that's not done well?
Speaker 3: Right?
Speaker 1: I think it has officially died.
Speaker 2: Okay, I know exactly, Okay, I just I know there's
Speaker 2: a few, and I know exactly which one that is.
Speaker 2: I have spent time in it multiple times. I was
Speaker 2: there before it died because I lived there twenty years ago.
Speaker 2: But when I did, it was pretty quiet overall, like
Speaker 2: it was pretty grim.
Speaker 1: Yeah, this was sort of a classic Texas mall from
Speaker 1: what I can gather, opened in nineteen seventy one and
Speaker 1: then closed for good in twenty fifteen. Here's another question.
Speaker 1: Have you ever been to the domain?
Speaker 2: Yes? And that one is much more busy and I'm
Speaker 2: pretty and still exists.
Speaker 1: Yes, So that one opened in two thousand and seven.
Speaker 1: It is still open. From what I can tell, it's
Speaker 1: very popular. It's sort of an upscale shopping destination. And
Speaker 1: these two shopping malls, the reason I bring them up
Speaker 1: is they kind of stick in my mind as the
Speaker 1: classic example of what happened to malls in the sort
Speaker 1: of twenty tens. So you had this bifurcation in the
Speaker 1: market where some of the upscale ones, the ones that
Speaker 1: had some sort of i don't know, like specific offering
Speaker 1: in terms of entertainment things like that, did pretty well,
Speaker 1: while the old school ones, the ones that maybe had
Speaker 1: big anchor tenants that were no longer as popular, a
Speaker 1: lot of those went out of business totally.
Speaker 2: I didn't first of all, I just want to say
Speaker 2: I appreciate and didn't realize that this is going to
Speaker 2: be an Austin, Texas episode, So thank you for that.
Speaker 1: Yeah, just for you, Joe.
Speaker 2: But that did you know that crystallizes it perfectly for
Speaker 2: me because I know those two malls and I know
Speaker 2: how different they are. And the High Island Mall was
Speaker 2: sort of you know, off a highway, not in a
Speaker 2: great location. Is the kind of place where it probably
Speaker 2: had some you know, fast food Chinese in the food court,
Speaker 2: probably a place that sold hats, maybe a candle store,
Speaker 2: something like that, you know, called like wis.
Speaker 1: You are actually like vividly bringing to life for me,
Speaker 1: like the early two thousands American.
Speaker 2: Mall, and then the domain has like, you know, probably
Speaker 2: a really nice apple store in it. I don't know
Speaker 2: for sure, a really nice apple store, and some really
Speaker 2: nice restaurants, probably like a cool like burrito restaurant and
Speaker 2: stuff like that. So yeah, I think that's it. That's
Speaker 2: the story of malls. You nail it.
Speaker 1: Yes, And the reason I bring up malls in general
Speaker 1: is because obviously there's been a lot of discussion about
Speaker 1: the future of commercial real estate and malls fit squarely
Speaker 1: into that category, but also in the context of concerns
Speaker 1: about stress in the office market in particular. Yeah, I
Speaker 1: keep reaching back to malls as the analogy here, so like,
Speaker 1: clearly there is a structural issue happening in the market.
Speaker 1: But that said, you know, you can have specific properties
Speaker 1: that do better, you can have specific properties that go
Speaker 1: out of business completely, like the Highland Wall, And so
Speaker 1: that bifurcation seems really important to me.
Speaker 2: And I think, you know, we've never we've obviously done
Speaker 2: a handful of of office episodes, but it makes sense
Speaker 2: to think more about this bifurcation because one thing that
Speaker 2: we've learned, even from talking to various people in the
Speaker 2: office spaces, like oh, class A is fine now that
Speaker 2: I know A. Class A is definitely but they're like, okay,
Speaker 2: Class A the really nice new locations, they're fine. It's
Speaker 2: just that there's a lot of other space that is
Speaker 2: not what people think of as the modern office building.
Speaker 2: That's right.
Speaker 1: There's domains and there's highlands.
Speaker 3: So I love it.
Speaker 1: So on this episode, we're going to be digging more
Speaker 1: into the office sector and commercial real estate more broadly,
Speaker 1: and I am very pleased to say that we do
Speaker 1: indeed have the perfect guest. We're going to be speaking
Speaker 1: with Liza Crawford. She's a portfolio manager and co head
Speaker 1: of Global Securitized over at TCW and a long time
Speaker 1: investor in this space, someone who also covered malls for
Speaker 1: a while in the I think in the early twenty
Speaker 1: or twenty ten. So we're going to get into all
Speaker 1: of that with her. Liza, thank you so much for
Speaker 1: coming on all thoughts, thank.
Speaker 3: You so much for having me. I'm so excited to
Speaker 3: be chatting with y'all today.
Speaker 1: Well we're very excited as well. Ooh, and you said y'all,
Speaker 1: so we're really like, we're bringing the Texas theme in
Speaker 1: this episode.
Speaker 3: Love it?
Speaker 2: Are you Texan?
Speaker 3: I was born in Houston. I went to high school
Speaker 3: in Dallas, so I've moved around to fair Bit though. Awesome.
Speaker 1: So did I get your career summary broadly correct? A
Speaker 1: longtime player in the securitized space, including in commercial real estate,
Speaker 1: so things like commercial mortgage back bond CMBs, stuff like that.
Speaker 1: And also you weren't looking at malls at one point, right, Yeah.
Speaker 3: So I've always been in securitize for my career and
Speaker 3: I started in two thousand and nine, so a pretty
Speaker 3: exciting time. Interned in two thousand and eight particularly exciting
Speaker 3: as well, and I focused on various areas of securitize.
Speaker 3: But when I joined TCW, the firm I work at now,
Speaker 3: I was a commercial mortgage backed securities trader, so I
Speaker 3: dedicated all of my time to commercial real estate research
Speaker 3: and trading and to your commentarycy, it involved a number
Speaker 3: of property tours and years ago malls were the focus
Speaker 3: and it was pretty grim out there for a number
Speaker 3: of tours, but you guys nailed it on the bifurcation.
Speaker 3: You can really see that when you're visiting these assets,
Speaker 3: and you can see it come through in cash flows
Speaker 3: and sponsored decision making. And then currently at TCW. I'm
Speaker 3: cohead of Global Securities, so now I have the pleasure
Speaker 3: of looking across the broader almost thirteen trillion dollars securitized market.
Speaker 1: Joe, Can I just say when analysts go on the
Speaker 1: real life tours of shopping malls or stores in general,
Speaker 1: that is my all time favorite research. Like, I love
Speaker 1: the idea of everyone just like hopping in a car
Speaker 1: and we're going to look at football at this mall.
Speaker 3: Well.
Speaker 2: Same, And actually that was going to be my question
Speaker 2: because you know, I remember the Highland Mall that Tracy
Speaker 2: brought up. I know the domain, and I do remember
Speaker 2: you know, the Highland Mall is pretty quiet. But I
Speaker 2: have to imagine that as a professional you walk through
Speaker 2: the mall. I walked through the mall. I just sort
Speaker 2: of noticed vaguely like this is quiet, this is busy.
Speaker 2: What does a professional look at when you're on one
Speaker 2: of these site tours for a mall and you're like
Speaker 2: looking at them from a sort of due diligence investment standpoint?
Speaker 2: What are the things that the pro really notices beyond
Speaker 2: just this is kind of quiet.
Speaker 3: Yeah, So with respect to the malls, you're looking to
Speaker 3: see if the atmosphere is inviting, so have sponsors meent
Speaker 3: any effort to try to add natural light, to try
Speaker 3: to add seasonal decor, so that's just the natural ambiance.
Speaker 3: Then you're also looking at the density, so is it populated,
Speaker 3: are people walking around, what are people holding? Are they
Speaker 3: holding bags that they're shopping or are they just kind
Speaker 3: of hanging out and they're taking advantage of air conditioning.
Speaker 3: You're checking out the parking lot to see if they
Speaker 3: are a number of cars there. And then you're looking
Speaker 3: at the tenant mix, and this is you know, you
Speaker 3: can see the real bibercation. So I remember just Burlington
Speaker 3: coat factories would always be crushing it. There'd be so
Speaker 3: many people in there. And then there'd be areas where
Speaker 3: you've got your fourth sneaker store and nobody's in any
Speaker 3: of these properties, or you'd have another hat store or
Speaker 3: eyebrow a shop that you realize they're probably not paying
Speaker 3: any rent, they're not really even economic, but they are
Speaker 3: at least kind of filling space. And then one of
Speaker 3: the most kind of egregious things you'll see on these
Speaker 3: property tours for weak er assets is whole areas that
Speaker 3: are effectively close off or there are very explicitly tenant
Speaker 3: temporary tenants, so army recruiting, for example, polling stations. So
Speaker 3: there you can see a landlord perhaps exploring alternative uses,
Speaker 3: but as a debt investor, some of it looks like
Speaker 3: a little bit of a smoke screen to use occupancy
Speaker 3: numbers that frankly don't drive value for the asset.
Speaker 2: Tracy. The last time this is a fact. The last
Speaker 2: time I was in the Highland Mall.
Speaker 1: I know this.
Speaker 2: I happened to be with my mother in law. She
Speaker 2: was voting. It was a polling location at the mall,
Speaker 2: So there you go. That was her local place too.
Speaker 2: And I don't know why we why we're tell you along. Yes,
Speaker 2: that is my last memory of the Highland Mall.
Speaker 1: I'm so pleased with this anecdote that it's like worked
Speaker 1: out so perfectly because we didn't actually talk about this
Speaker 1: before the podcast, but this is great. So just going
Speaker 1: back to that analogy of the Highland and the domain
Speaker 1: and its sort of application to the broader commercial real
Speaker 1: estate market and office properties in particular. I mean, I
Speaker 1: mentioned that's the mall is the sort of prism that
Speaker 1: I'm looking at the office space through. But tell us
Speaker 1: how you're viewing it, Like, how useful is the shopping
Speaker 1: mall sector as an analogy to stress in the office
Speaker 1: market right now?
Speaker 3: It's very helpful as an analogy with respect to bifurcation.
Speaker 3: I think one of the mistakes folks can make is
Speaker 3: paint everything with a broadbrush. And I'm sure you y'all
Speaker 3: remember plenty of headlines of malls are all dead, and
Speaker 3: there were plenty of malls that were on their way
Speaker 3: to dying, zombie, ugly irrelevant. There are too many of them,
Speaker 3: et cetera. So, of course, but there are some malls
Speaker 3: that continue to drive consumer demand, serve a purpose, be
Speaker 3: well managed. So that bifurcation trend is very real in
Speaker 3: the office space now. And would love to get into
Speaker 3: kind of compare contrast of what as a debt investor
Speaker 3: we look for in the different spaces and the different
Speaker 3: kind of workouts and evolution of these two property types.
Speaker 3: But importantly in office we're really seeing that bifurcation now. Joe,
Speaker 3: you mentioned Class A earlier, and even Class A is
Speaker 3: being reviewed and now we have trophy or premiere, and
Speaker 3: you know what differentiates Class A from you know, the
Speaker 3: actual trophy premiere. Well, Everything that was a newer build
Speaker 3: maybe fifteen twenty years ago, was Class A. Anything that
Speaker 3: maybe had a good view or it would be Class A.
Speaker 3: And now Trophy Premiere means it's either a more recent build,
Speaker 3: best in class or a more recent renovation, and it
Speaker 3: has more than just a good view or location. It
Speaker 3: has actual amenities to attract tenants, whether that's conference space
Speaker 3: or an excellent food court or gym, et cetera.
Speaker 2: I want to obviously talk more about office and start
Speaker 2: getting into this, but I just have one deep tale
Speaker 2: going back to the mall question. What stood out to
Speaker 2: you about the existence of a bustling Burlington coke factory.
Speaker 2: What was it specifically that that told you, because that
Speaker 2: was the one brand that you identified as a thing.
Speaker 2: What was that saying to you?
Speaker 3: Yeah, I think when you're when you're touring malls and
Speaker 3: it gets really sad, you really get excited about the
Speaker 3: bright spots, and Burlington co Factory was really that bright spot.
Speaker 3: And it also signals that there is demand to be
Speaker 3: identified and you know, leaned into as a landlord or sponsor.
Speaker 3: So a lot of these properties needed to be right
Speaker 3: sized from a square footage for the actual you know,
Speaker 3: retail demand, but there's consumer demand in the area and
Speaker 3: you need to retenant your space to meet that demand.
Speaker 3: And what you see in office as well as you
Speaker 3: saw in retail is that bifurcation translates into sponsors making
Speaker 3: a decision this asset is not core to my portfolio
Speaker 3: and I'm planning on walking away from it or you know,
Speaker 3: rolling off of it in the coming years. So what
Speaker 3: is the point of investing any energy in leasing it up,
Speaker 3: in making sure our tenants are happy with the location
Speaker 3: that we are investing in demand drivers that ultimately help
Speaker 3: the broader kind of ecosystem of tenants. So instead you
Speaker 3: just see the under investment so present from waldoff areas
Speaker 3: or these you know, day to day tenants or month
Speaker 3: to month tenants likely not paying any rent, and then
Speaker 3: the successful you know, consumer demand moving into some of
Speaker 3: these some of these retailers that are actually relevant to
Speaker 3: the local population.
Speaker 1: Just going back to what you were saying about trophy
Speaker 1: properties and some signs of stress even creeping into trophy
Speaker 1: office buildings. So you know, we heard a lot about
Speaker 1: how important quality is in the office space and that
Speaker 1: some of the older offices are probably going to encounter
Speaker 1: significant troubles in the current cycle. But maybe the Class
Speaker 1: A would do okay, and certainly the trophy properties should
Speaker 1: be doing relatively well. But it is interesting if we're
Speaker 1: seeing even those start to come under pressure. So I
Speaker 1: guess I'm curious, like why that's happening. And then secondly,
Speaker 1: how much of it is rents versus interest rates going up?
Speaker 3: They're great question. So with respect, so why we're seeing
Speaker 3: that Class A cut under pressure? There are two main reasons. One,
Speaker 3: time you know, something that is Class A doesn't just
Speaker 3: remain Class A. You can't set it and forget it.
Speaker 3: You know, you need to continuously invest in that asset
Speaker 3: and make sure it is designed to meet tenant demands
Speaker 3: of today. And then two, you had COVID. COVID all
Speaker 3: of a sudden introduced every CEO you know, into the
Speaker 3: conversation of what do we want our employees to benefit
Speaker 3: from in shared office space. I think we all took
Speaker 3: it for granted before COVID happened. We just showed up
Speaker 3: to the office and if we had a terrible cubicle,
Speaker 3: we just went with it. I work on a trade floor,
Speaker 3: so personal space is lacking. I don't you know. I
Speaker 3: don't use an office. I don't have a cubicle, but
Speaker 3: if I explore other floors of our company, there's just
Speaker 3: you know, cubicle on cubicle, and there's a lot left
Speaker 3: to the imagination. It's not as engaging and you don't
Speaker 3: always benefit from that shared space communication, et cetera. So
Speaker 3: TCW is actually a great example. We've upgraded our space.
Speaker 3: We're moving in a couple of weeks to Class A property.
Speaker 3: We're in what perhaps was once considered Class A now
Speaker 3: but it's arguably Class B in dropping quickly. But we're
Speaker 3: moving into a clas where you have more natural light,
Speaker 3: you have brighter colors, you have upgraded amenities, you have
Speaker 3: technological improvements, and more shared space. So it really is
Speaker 3: an evolution of meeting tenant demand, and tenant demand is
Speaker 3: the number one priority. As we're in a tough market
Speaker 3: for office landlords. They are seeing a net reduction in
Speaker 3: demand and they need to be proactive to get the
Speaker 3: best tenants in their space and build out the amenities
Speaker 3: and whatnot that they need. And that really is fundamentally
Speaker 3: the definition between what is trophy and what is a
Speaker 3: Class A. That just keeps falling further down the quality spectrum.
Speaker 1: So at the same time that they're needing to invest
Speaker 1: in the properties. I mean, rental income is presumably flat
Speaker 1: or going down because demand is weakening, but costs are
Speaker 1: going up in the form of financing.
Speaker 3: Yes, so excellent point. With the rate move in the
Speaker 3: last kind of eighteen months, the capital markets have created
Speaker 3: acute stress for landlords that use financing to own and
Speaker 3: operate their real estate portfolios. And it's very common. Commercial
Speaker 3: real estate is a levered asset class. It is sensitive
Speaker 3: to interest rates. The sponsors that have locked in lower
Speaker 3: fixed rate debt in twenty twenty, twenty twenty one, they're
Speaker 3: sitting tight, right. They might have a ten year fix strate,
Speaker 3: they've got plenty of time. But other sponsors took out
Speaker 3: shorter floating rate debt, so they are acutely vulnerable to
Speaker 3: their rates resetting five and a half points higher. And
Speaker 3: it is acting as a catalyst for them to accelerate
Speaker 3: their decision making of what assets belong in their portfolio,
Speaker 3: what assets will make sense long term, what assets are
Speaker 3: economic to own, and what assets just don't make sense anymore. So.
Speaker 3: After ten years of low rates and low growth, the
Speaker 3: debt markets got very sanguine in both the appraisals they'd
Speaker 3: accept for office, in the lack of differentiation they demanded
Speaker 3: from these valuations and sponsor quality, et cetera. In office
Speaker 3: and borrowers or the sponsors the owner operators that borrow
Speaker 3: in the capital markets got aggressive with the amount of
Speaker 3: leverage they felt comfortable with their assets. So to your point, Tracy,
Speaker 3: that's where we're seeing very quick pivots for some very
Speaker 3: large sponsors to exit the entire office properties. You know,
Speaker 3: Blackstone and Brookfield are great examples there.
Speaker 2: By the way, just going back to what you were
Speaker 2: saying about, like, there was actually a great New York
Speaker 2: Times article three days ago November twenty six, the Envy
Speaker 2: office can instagrammable design lore young workers back by Emma
Speaker 2: Goldberg and and a code. But it sort of speak
Speaker 2: to exactly what you're saying, light and everything, and they have,
Speaker 2: you know, these offices that are featured at all, you know,
Speaker 2: like Millennial Pink and all that stuff. What else goes
Speaker 2: into Joe.
Speaker 1: I don't know why you don't like millennial Pink. You
Speaker 1: always mention it as like a negative example. I like it.
Speaker 2: I'm just so tired of it. It's cool twenty thirteen
Speaker 2: is like, oh cool new color. It's everybody's like, oh
Speaker 2: my god. Twenty twenty three are still around. What else
Speaker 2: looks like? A true when you if you know, you
Speaker 2: walk into an obvious like okay, this is a trophy asset.
Speaker 2: What does that look like? What are some other things
Speaker 2: that you would expect to see.
Speaker 3: You'd expect to see very high quality entryways, lobbies, lofty ceilings.
Speaker 3: You know, ideally, like atrios, you would have separate elevator
Speaker 3: banks for either different floors or different tenants. A luxury feel, right.
Speaker 3: You want both your employees to feel really excited and
Speaker 3: proud and productive when they come to work. But you
Speaker 3: also want your clients to feel like they're special and
Speaker 3: that they are working with a really high quality company.
Speaker 3: And then I mentioned kind of those amenity these floors.
Speaker 3: Other examples include just having outdoor space, just giving your
Speaker 3: employees the opportunity to step outside and get some fresh air,
Speaker 3: see some greenery. And then I think everyone and you know, Bloomberg,
Speaker 3: you guys are leading the charge on it, but everyone
Speaker 3: wants to snacks. The coffee upgrade, So we've seen, you know,
Speaker 3: beyond just maybe shared amenities that multiple tenants can enjoy.
Speaker 3: You've also got more amenity focus on tenants dedicated floor
Speaker 3: space because people want to be able to take a
Speaker 3: break and get a nice coffee.
Speaker 2: We don't have any Instagram walls here at Bloomberg as
Speaker 2: far as I know, although actually in the basement there's
Speaker 2: a pretty cool art installation that is pretty grammable. But
Speaker 2: by and large, I do feel like we work in
Speaker 2: a trophy office here in New York, just sitting aside
Speaker 2: the sort of more qualitative differences, Like can you speak
Speaker 2: to the quantitative differences that you see right now in
Speaker 2: this sort of trophy, whether it's vacancy rates or cap
Speaker 2: rates or anything else versus everything else.
Speaker 3: Yes, And then I think it's important we also talk
Speaker 3: about geography and specific city stories, so as it relates
Speaker 3: to the quantitative differentiation we're seeing for trophy assets. It's
Speaker 3: not uncommon to see post COVID stress translate into a
Speaker 3: ten percent vacancy. There are some assets that only have
Speaker 3: a three percent vacancy, whereas a BC or even a
Speaker 3: weaker class A had ten percent going into COVID currently
Speaker 3: has a twenty twenty five percent. And then some assets
Speaker 3: are effectively vacant and those are that's where you see
Speaker 3: these distress sales come through. Want to lean into a
Speaker 3: couple items here, So how do trophy offices how are
Speaker 3: they best able to maintain higher occupancy? It's because they
Speaker 3: attract high quality tenants and they demand high quality leases
Speaker 3: from those tenants. They have to pay for it in
Speaker 3: today's market. So what is a high quality lease? A
Speaker 3: high quality lease is a ten year term with no
Speaker 3: contraction options, no termination options. You're trying to avoid volatility
Speaker 3: in your tenant role. You're trying to avoid your tenants
Speaker 3: having too much optionality to walk, and then you're also
Speaker 3: adding high quality tenants, so you're mitigating the risk that
Speaker 3: they go bankrupt, right, So high quality sponsors are very
Speaker 3: focused on that. I think eessel Green is a public
Speaker 3: read and they're the largest Manhattan office landlord. They're always
Speaker 3: highlighting that they do an excellent job with that one.
Speaker 3: Vanderbilt is their trophy asset, and it's very evident in
Speaker 3: that property. What happens in weaker kind of BC offices
Speaker 3: is the sponsors are on their back feet. They have
Speaker 3: to accept what tenants are willing to give them, so
Speaker 3: that typically translates into shorter lease terms. So kind of
Speaker 3: a two to five year and that creates even more
Speaker 3: vulnerability to the economic cycle, to tenants downsizing or rotating
Speaker 3: into another asset. And it also means that you have
Speaker 3: a weaker tenant base, you are more exposed to bankruptcies
Speaker 3: and the need to renegotiate rent lower. We work. It's
Speaker 3: a great example of the tenant that nobody really wanted.
Speaker 3: They were expanding massively for years, but sophisticated landlords made
Speaker 3: sure they were two percent or less of their revenues
Speaker 3: to mitigate that risk. Yeah, we work is from a
Speaker 3: debt investor perspective, they've been you know, it's a curious
Speaker 3: story and I don't know how open I can be,
Speaker 3: but it's very frustrating to see some of their behavior.
Speaker 3: So on the quantitative side, we should see that bifurcation
Speaker 3: to continue to play out. And perhaps one of the
Speaker 3: most stark ways to evidence this is when we see
Speaker 3: some of these distressed sales. It's still early in distress sales,
Speaker 3: but from a dollar per square foot valuation perspective, you
Speaker 3: would usually pre COVID see one thousand per square foot
Speaker 3: for a trophy class A off a trophy asset in
Speaker 3: New York City in San fran with the rate move,
Speaker 3: with the stress in the capital markets, we as set
Speaker 3: investors quickly reset to closer to a five hundred per
Speaker 3: square foot implied mark to market valuation. Now, if you're
Speaker 3: a sponsor with a ten year fixed rate mortgage and
Speaker 3: you have your tenants in there for ten years, you're
Speaker 3: insulated from this period of time, so you don't need
Speaker 3: to monetize that implied mark to market valuation. You can
Speaker 3: hide it, you know, with various even with a JV
Speaker 3: interest sale, you can nagle away to really preserve that
Speaker 3: kind of topic valuation. But for weaker assets, they cannot hide.
Speaker 3: The sponsors walk away from them, They hand over the
Speaker 3: keys to the lender, and the lender gets an updated
Speaker 3: appraisal that's closer to market, and or the lender sells
Speaker 3: the asset into the market, and that's where you're seeing
Speaker 3: valuation declines beyond seventy percent. I mentioned Blackstone walking away
Speaker 3: from an asset in New York City that's seventeen forty Broadway.
Speaker 3: It's basically empty, and the valuation was closer to one
Speaker 3: thousand per square foot. In twenty fifteen, they committed over
Speaker 3: three hundred million with that acquisition and they locked once
Speaker 3: the largest tenant rolled, and the valuation came in around
Speaker 3: three hundred per square foot, just under the updated appraisal.
Speaker 3: So it is dire out there. But yeah, so if
Speaker 3: you are insulated, owning and operating a business using prudent leverage,
Speaker 3: you can navigate economic cycles. If you are overlevered or overextended,
Speaker 3: or going through your portfolio and exiting the losers, that's
Speaker 3: where we see kind of these real prints come through,
Speaker 3: and it adds that quantitative data to really ink, you know,
Speaker 3: how far some of these assets can fall.
Speaker 1: So I definitely want to ask you more about the
Speaker 1: specific things that go into a decision by a sponsor
Speaker 1: to walk away from a property or try a workout.
Speaker 1: But since you mentioned geographies, and since a lot of
Speaker 1: what we're talking about is bifurcation in the market, tell
Speaker 1: us what you're seeing in different areas.
Speaker 3: Yeah. So we work in downtown La here at TCW,
Speaker 3: and the vacancy is thirty percent and that seems like
Speaker 3: a number on a good day, but that's the official
Speaker 3: reported number. So there is just too much supply for
Speaker 3: limited demand and there are no real, tangible, massive demand
Speaker 3: drivers to soak up that incremental supply, So it is
Speaker 3: a central business district that suffer from competitors around it.
Speaker 3: West Hollywood or sorry, West LA offers more attractive properties
Speaker 3: for some office users. Then you've got Century City, which
Speaker 3: has the trophy assets in the market. So Downtown LA
Speaker 3: really almost fits more of that super regional mall traditional
Speaker 3: story of the area. That demand in the area just
Speaker 3: cannot support three competitive assets, so you're going to have
Speaker 3: that bifurcation. One's going to win and one to two
Speaker 3: are going to lose. So that's the story in Downtown LA.
Speaker 3: For example, if we move to San Francisco, that area
Speaker 3: has so many headwinds, but you know, one of the
Speaker 3: major issues is the amount of tenant concentration. It's healthy
Speaker 3: to do a compare contrast of San Francisco and New
Speaker 3: York City. San Francisco and New York City both had
Speaker 3: full valuations. They had a lot of international investors that
Speaker 3: really supported high persquare foot valuations for office real estate.
Speaker 3: San Francisco before twenty nineteen had before COVID had a
Speaker 3: sub five percent vacancy and now it's closer to you know,
Speaker 3: thirty percent. It still has headwinds to remote work. I
Speaker 3: was just reading that around. You know, I think around
Speaker 3: thirty plus percent of job postings are remote in San Francisco.
Speaker 3: Compare that to Manhattan, where you're attracting talent that wants
Speaker 3: to be there, wants to live there, and there's a
Speaker 3: large financial presence that is going to demand their tenants
Speaker 3: are in the office. In the technology space, you have
Speaker 3: some larger employers like a Google that have indicated they
Speaker 3: want some type of office presence, but you also have
Speaker 3: many smaller firms that would love to continue to save
Speaker 3: money on office expense, and their business models work fully remote,
Speaker 3: and they're going to continue to benefit from that until
Speaker 3: you know, their venture capital investor demands that they get
Speaker 3: an office space and go about things that way. So
Speaker 3: San Francisco, you know, unfortunately it has way too much
Speaker 3: ten and concentration. There's a decline in office space demand
Speaker 3: in that sector. And then adding insult to injury, the
Speaker 3: valuations were so frothy that these owner operators are inevitably
Speaker 3: particularly over levered with their debt. So this idea that
Speaker 3: the catalyst of making a faster decision on what assets
Speaker 3: you keep what assets you leave is your debt maturity.
Speaker 3: I think there's around four billion of Sandfran office in
Speaker 3: this commercial mortgabacked securities market that's coming due in twenty
Speaker 3: twenty four, so we'll see, you know, how more of
Speaker 3: this plays out. And then unfortunately San Francisco also has
Speaker 3: declined in its level of attractiveness for employees. There are
Speaker 3: plenty of reports everyone sees them of blights, crime, et cetera.
Speaker 3: So it really, it really continues to suffer and it
Speaker 3: it doesn't take too much to try to improve things.
Speaker 3: But if we think about the tech bubble, I think
Speaker 3: that took around six years for San frian to come back,
Speaker 3: so it's gonna take some time and concerted effort.
Speaker 2: You know, you mentioned Century City and that happens to
Speaker 2: be where Bloomberg has its Los Angeles office, which I've visited,
Speaker 2: and it is indeed trophy property exactly like how you
Speaker 2: I think imagine, you know, the ground floor there's like
Speaker 2: Sweet Greens and Poke restaurants, et cetera. You know, we've
Speaker 2: done We did an episode once on the challenge of
Speaker 2: converting office to residential, which is very tricky and limited.
Speaker 2: How much effort is there or how possible is it
Speaker 2: to upgrade A I don't know Class B to something
Speaker 2: that resembles Class A or Class A is something that
Speaker 2: resembles trophy. Is that a thing that some of these
Speaker 2: owners of underperforming assets are attempting to do.
Speaker 3: It is a thing, but it's not super easy and
Speaker 3: it's expensive, especially when everyone's cost of financing has shot
Speaker 3: through the roof. But it just takes everyone should have
Speaker 3: upgraded their lobby and their elevators over the last kind
Speaker 3: of five to ten years, and what a fantastic time
Speaker 3: to do it, you know, with respect to COVID and
Speaker 3: having no tenants in not everyone did that, but that's
Speaker 3: a great example of a class B effort to maintain relevance.
Speaker 3: And then also if you're looking at some of these
Speaker 3: smaller office spaces that are a lot of your kind
Speaker 3: of Class B and C, the focus is less to
Speaker 3: make them all of a sudden a trophy and more
Speaker 3: to design around what the tenant demand is. So hopefully
Speaker 3: you still have you know, doctors, dentists, or lawyers or
Speaker 3: somebody that is comfortable with a smaller office footprint. There's
Speaker 3: a geo geographic attraction. They want a lower per square
Speaker 3: foot valuation, but they're also going to need better natural
Speaker 3: light they're also going to need likely a better floor plan,
Speaker 3: and that that costs money from the sponsor. So I'd
Speaker 3: say we're likely to see the b's and the A
Speaker 3: minuses make upgrades to make themselves more attractive to tenants
Speaker 3: and make economic decisions that way, rather than see too
Speaker 3: many assets go from an A minus B to we're
Speaker 3: going to just go for broke with trophy. There are
Speaker 3: some assets that are that we're having fun watching. I'll
Speaker 3: give you an example, but two forty five Park is
Speaker 3: in New York City. It's a large you know, I
Speaker 3: think it's fair to call it a trophy office. It
Speaker 3: was owned by H and A back in twenty seventeen
Speaker 3: with some very aggressive financing up to eighty percent loan
Speaker 3: to cost and the mezzanine lenders.
Speaker 1: Well, sorry, you just reminded me. H and A have
Speaker 1: like a really weird portfolio of properties from what I remember.
Speaker 3: Yeah, so there was a there was an influx of
Speaker 3: inn international buying, but particularly some of these Chinese conglomerates
Speaker 3: that had insurance but also pharmaceutical companies and H and
Speaker 3: A and and Bang our examples, and their portfolios included
Speaker 3: things like air airlines and then they really leaned into
Speaker 3: New York City Office and New York City Office, you know,
Speaker 3: as well as in Sandfray in office. The benefit of
Speaker 3: those kind of investments is you're putting a slug of
Speaker 3: money to work at once. Right, these are expensive, they're large,
Speaker 3: we have excellent property rights here. You do have kind
Speaker 3: of an established tenant role and can feel good about
Speaker 3: underwriting the cash flow. And at the time, financing was
Speaker 3: really cheap, so you could buy. You could go on
Speaker 3: a buying spree with pretty attractive financing. So for this
Speaker 3: two forty five Park property, ultimately Esselgreen moved from being
Speaker 3: the most subordinate lender to the owner and operator, so
Speaker 3: using their lender rights when H and A defaulted and
Speaker 3: two forty five Park, I was able to visit by
Speaker 3: leveraging the fact that I'm a client to one of
Speaker 3: their tenants, and it was really fun to see. That's
Speaker 3: a space where you're not going to compete. You're in
Speaker 3: an area with GP Morgan's new build and you're in
Speaker 3: an area with Eslo, Greens One Vanderbilt. You're not going
Speaker 3: to suddenly become them. But what you can do is
Speaker 3: upgrade what you have and benefit from your excellent location.
Speaker 3: Right by Grand Central, so I got to see their
Speaker 3: executive floor, So you lean into things like that, your
Speaker 3: tenants want a really fancy floor to bring their clients in.
Speaker 3: The entryway was grade. Everything had. Everything that I saw
Speaker 3: had more of a luxury feeling. So I think that's
Speaker 3: probably a great example of an older asset that's making
Speaker 3: strategic upgrades to really hold its own even though it
Speaker 3: can't suddenly become a twenty twenty delivered new build.
Speaker 1: So setting upgrades aside, can you talk a little bit
Speaker 1: more about the options that sponsor actually have. So let's
Speaker 1: say I'm sitting on a property that no longer makes
Speaker 1: economic sense, Like, what are the options that I have?
Speaker 1: I guess they span like a range from trying to
Speaker 1: raise additional capital to maybe just handing back the keys
Speaker 1: or something like that.
Speaker 3: Yeah, and that's key, you know, part of our investment
Speaker 3: analysis on the debat side. So it is very easy
Speaker 3: in the commercial mortage backed securities market to just hand
Speaker 3: back your keys. CNBS isn't a relationship lender like base
Speaker 3: or insurance companies. So and what do I mean by
Speaker 3: relationship lender that there's no recourse in a CMBs loan?
Speaker 3: It just asks for adverse selection for sponsors, and you
Speaker 3: see that translate into their financing. The sponsors, at the
Speaker 3: end of the day, they're obligated to pay their debt
Speaker 3: on an asset. If they don't, they're in default and
Speaker 3: lender writes kick in. They can either negotiate with the
Speaker 3: lender to get a modific A modification can include some
Speaker 3: type of relief for a temporary period of time forbearance
Speaker 3: is what it's called, on their cost of financing, sorry
Speaker 3: on their loan, or it can include more structured solutions
Speaker 3: like an extension for two to three years at some
Speaker 3: sort of adjusted rate within a lower rate, within an
Speaker 3: incremental kind of equity investment, good faith investment from the sponsor.
Speaker 3: And we're seeing that play out. If you took out
Speaker 3: a fixed rate loan five years ago, you're incentivized to
Speaker 3: extend that fixed rate maturity rather than go into today's
Speaker 3: market and accept lower valuations on your asset, lower leverage
Speaker 3: on your asset, higher cost of financing, and come out
Speaker 3: of pocket. So we'll continue to see those maturity defaults
Speaker 3: and modification extension solutions, and that's actually encouraging to see
Speaker 3: in a number of circumstances because it at least signals
Speaker 3: that the sponsor care about this asset. You know, we're
Speaker 3: always going to look for evidence of them continuing to
Speaker 3: invest in the asset and ensure it's relevant and generating
Speaker 3: income and whatnot. But the fact that they're not immediately
Speaker 3: walking away is encouraging. Whereas on the other side, give
Speaker 3: you some examples of tenants walking away or sorry, of
Speaker 3: sponsors walking away. We talked about seventeen forty Broadway for
Speaker 3: Blackstone in New York City. You also have Gas Company
Speaker 3: Tower as an example in downtown LA and the Ey
Speaker 3: Building where Brookfield walked away, and that is it is
Speaker 3: as simple as no longer paying your debt and basically
Speaker 3: not answering the call when servicers are looking to find
Speaker 3: you and not being available for a solution, and what happens.
Speaker 1: There are there repercussions for doing that, Like, you know,
Speaker 1: does Brookfield's reputation take a knock when it just walks
Speaker 1: away from a property like that or is.
Speaker 2: It just business?
Speaker 3: Unfortunately, there aren't enough repercussions. That's kind of part of
Speaker 3: the fun with CMBs. I suppose we do focus on
Speaker 3: sponsors and their capitalization. So it's a great example Brickfield
Speaker 3: is well capitalized, but you have to also check on
Speaker 3: the assets performance and the assets relevance in their portfolio
Speaker 3: to really determine if this is going to be something
Speaker 3: they focus on and they keep. And I mentioned earlier
Speaker 3: that CNBS in particular is a non recourse lender and
Speaker 3: it's not really a relationship lender, so it lends itself
Speaker 3: to adverse selection. And you saw that, you know, both
Speaker 3: on the retail side as well as in today's office market.
Speaker 3: To give you examples, Simon Property Group, an excellent owner
Speaker 3: operator of malls, would strategically finance their non core malls
Speaker 3: in CNBS. They would get pretty creative. You could see
Speaker 3: there was zero incremental investment in the assets, but somehow,
Speaker 3: you know, the valuation has increased off of you know,
Speaker 3: no incremental cash flow growth, really just a capital markets
Speaker 3: arbitrage benefiting from lower rates lower cap rates. You'd also
Speaker 3: see them take three properties and combine them with one
Speaker 3: that's pretty good and then two that are weaker and
Speaker 3: juice the overall metrics to see if the debt investors
Speaker 3: would feel more comfortable with owning that security. On the
Speaker 3: office side, you also see some strategic adverse financing. I
Speaker 3: use the example of gas company Tower for Brookfield, and
Speaker 3: they use shorter floating rate debt, and that's where it's
Speaker 3: tough to underwrite the asset for ten years. You really
Speaker 3: can't afford to support a ten year fixed rate because
Speaker 3: your tenant role is heavy, your current occupancy is weak.
Speaker 3: And then they levered it with additional debt beneath the mortgage,
Speaker 3: so mezzanine debt, and so really that can be viewed
Speaker 3: not to be too cynical, but debt investors, we have
Speaker 3: to be cynical as trying to reduce your basis in
Speaker 3: the asset as much as possible and set yourself up
Speaker 3: to even more conveniently walk away. And that's exactly what happened.
Speaker 3: You just hold the asset while you're still collecting cash
Speaker 3: flow from it. As soon as rates reset and you're happy,
Speaker 3: you have to come out of pocket to cover cash flow,
Speaker 3: you're walking. Yeah, as simple as that.
Speaker 2: I have just two questions, and then one is very short.
Speaker 2: The next time you're in New York for work, could
Speaker 2: you take me and Tracy on a like an office
Speaker 2: the field trip. Just just bring us along. Okay, great,
Speaker 2: we'll make that happen. So I guess the other question
Speaker 2: going back to the malls, like as you mentioned, I remember,
Speaker 2: you know, the zombie mall discourse, the end of the mall,
Speaker 2: and as you pointed out, it was just way too
Speaker 2: simplistic because not all malls were the same. What happened
Speaker 2: to those zombies, the ones that really were dead. Did
Speaker 2: they become top golf locations? Did they get totally torn down?
Speaker 2: Is there any lessons to be learned about what ultimately
Speaker 2: happened to physical spaces that like just were nowhere close
Speaker 2: to being economical in the new era.
Speaker 3: Yeah, it's still playing out, so you are seeing a
Speaker 3: transfer of ownership. We talked earlier about the Signmon example.
Speaker 3: Simon has excellent malls Class A malls now or you
Speaker 3: can find Class A plus malls that are over a
Speaker 3: thousand per square foot sales versus you know, six hundred
Speaker 3: years ago that seemed more attractive six fifty. So they
Speaker 3: exited non core assets in their portfolio. There are some
Speaker 3: owner operators where that's their niche. They're going to find
Speaker 3: the unloved mall that has been held by a really
Speaker 3: big player and there's been no leasing activity or focus
Speaker 3: on tenant composition for the last ten years and try
Speaker 3: to rehabilitate it, and there's probably some you know, reduction
Speaker 3: overall of square footage, and then there's also that kind
Speaker 3: of upgrade into whatever the demand looks like for the
Speaker 3: local population. Top golf you mentioned jokes, that's fantastic. I
Speaker 3: love top golf. So that's a great example. You know
Speaker 3: that there's be more top golfs everywhere. Yeah, but you
Speaker 3: actually have these David busters to see that is actively,
Speaker 3: actively happening and continues to And then there's some where
Speaker 3: it's just going to be an empty parking lot and
Speaker 3: a dilapidated building that's just going to be you know, blight.
Speaker 3: Effectively for years there was frankly overbuilding. There are areas
Speaker 3: where you really don't need it. There are some efforts
Speaker 3: to redevelop into multifamily, for example, and that takes time
Speaker 3: and good developers and owner operators and coordination with you know,
Speaker 3: local governments. And you'll probably remember when there was so
Speaker 3: much buzz about all these spaces becoming industrial facilities. And
Speaker 3: that's maybe a great example to talk about bifurcation as well.
Speaker 3: In theory. Uh, if you have a mall that's typically
Speaker 3: located at a highway intersection. It could be a good
Speaker 3: location for some type of warehouse distribution, but in practice
Speaker 3: you build is relatively efficient and is what tenants like
Speaker 3: an Amazon typically want, And you can also find cheaper
Speaker 3: to access or easier to own an operate space away
Speaker 3: from just absorbing a two million square foot you know, structure.
Speaker 3: So it was kind of theory versus practice that that
Speaker 3: is also, you know, we're not going to save all
Speaker 3: malls through industrial the same way we're not going to
Speaker 3: save all office properties through multi family conversion.
Speaker 1: So I am conscious of the time and I realized
Speaker 1: we could probably ours. Yeah, we could go on for
Speaker 1: hours with you, but.
Speaker 2: Just listing addresses.
Speaker 1: I'm talking about individual properties. But since we are on
Speaker 1: the theme of bifurcation, I feel like I have to
Speaker 1: ask you about differences in the capital stack as well.
Speaker 1: So like junior versus senior loans for commercial properties, are
Speaker 1: we seeing that bifurcation story there as well?
Speaker 3: We are, Yeah, you guys are where there's plenty of
Speaker 3: stress in the SIERI market, but under the hood there's
Speaker 3: also a risk transfer in you know, subordinate notes. So mezzanine,
Speaker 3: for example, you've got some players that are going to
Speaker 3: take advantage of that as an access point to to
Speaker 3: take over assets. You've got other players that bought a
Speaker 3: five percent fixed rate mez thinking it was an attractive
Speaker 3: return three years ago in a relatively safe asset that
Speaker 3: no longer want to have that exposure. It's defaulted. They
Speaker 3: don't know what to do. They weren't trying to access
Speaker 3: a property through that. So from our perspective, we have
Speaker 3: as set investors where we're trying to make thoughtful investments
Speaker 3: where we're not having to take over an asset that
Speaker 3: would mean that it defaulted. There's some examples where you know,
Speaker 3: maybe maybe that's a play we could consider. So we're
Speaker 3: typically reviewing or we're always reviewing the quality of the asset.
Speaker 3: Most investors are going to focus on things that avoid default,
Speaker 3: and then where you play in the capital structure is
Speaker 3: going to be determined by you know, relative value and
Speaker 3: kind of sourcing. So we we're more commonly in the
Speaker 3: mortgage portion, in the CMBs portion that gets kind of
Speaker 3: tranched out, so you can play in seniors, you can
Speaker 3: play across the cab stack as you'd expect if you
Speaker 3: like the mortgage. So let's say it's a one billion
Speaker 3: dollar mortgage. You typically like the billion dollar CMBs deal
Speaker 3: that's turning out that mortgage, that's reframing it into more
Speaker 3: marketable securities. And then your decision making really comes down
Speaker 3: to relative value. With respect to reviewing the capital structure,
Speaker 3: you always want to be mindful of how much leverage
Speaker 3: is on the asset and the reason the sponsor took
Speaker 3: out so much leverage. It typically is a negative signal
Speaker 3: if there's too much complexity in the capital structure. If
Speaker 3: you've got three mes notes, that's an easy red flag.
Speaker 3: That means you couldn't find one slug of mes, You
Speaker 3: couldn't find a buyer for one slug of mes. Instead,
Speaker 3: you're kind of just trying to slice and dice and
Speaker 3: find the best the best buyer for specific portions and
Speaker 3: their levels where they you know the return they need
Speaker 3: to see to take that risk. And then also you
Speaker 3: always want to see who those buyers are because they
Speaker 3: are first in line to navigate distress in the asset.
Speaker 3: We talked earlier about two forty five Park. When we
Speaker 3: see H and A as a non traditional owner operator
Speaker 3: of New York City Office acquire that asset at an
Speaker 3: uneconomic capitalization rate, that's a head scratcher, and eighty percent
Speaker 3: load to cost is a head scratcher. But when you
Speaker 3: see sl Green position themselves in that mez see, you
Speaker 3: know how that's going to work out. You know they
Speaker 3: are strategically investing in that most subordinate mes to be
Speaker 3: in position to step in and ultimately take control of
Speaker 3: that asset. So those are all things we're always analyzing
Speaker 3: who the players are looking at relative value across the
Speaker 3: capital structure. And then for our you know, most of
Speaker 3: our client portfolios really focused on the debt side, and
Speaker 3: I don't want to surprise you all, but plenty of
Speaker 3: people that are focused on the dead side that underwright
Speaker 3: to find credits that should avoid defaults are probably scratching
Speaker 3: their heads at the amount of loans that have default
Speaker 3: risk in their portfolios. And you know, I think that
Speaker 3: fits into some of the regional banks and we'll see
Speaker 3: that kind of play out over time as well.
Speaker 1: Oh man, I feel bad ending the interview right there,
Speaker 1: because I would love to talk about bank exposure to
Speaker 1: see are we although I think we did do an
Speaker 1: episode earlier in the year. Okay, so we are sort
Speaker 1: of covered, but our producers are giving us the time signal.
Speaker 1: But Liza, that was so good. Thank you so much
Speaker 1: for joining odd lots really appreciate it.
Speaker 3: This was so much fun. I appreciate y'all letting me join,
Speaker 3: and I'm completely happy to take you all on property tour, right.
Speaker 2: Yeah, we are serious. We are for real going to
Speaker 2: take you up on that next time or next time
Speaker 2: we're in LA.
Speaker 3: We should at all.
Speaker 2: We'll do, We'll do.
Speaker 3: Excellent.
Speaker 1: Sounds great, Joe. Just to bring it full circle, one
Speaker 1: of the loans financing Highland did actually end up in
Speaker 1: a CMBs deal. It was put together by JP Morgan.
Speaker 3: And.
Speaker 1: I think that the only reason I remember it is
Speaker 1: because I wrote about it back in twenty thirteen. The
Speaker 1: reason I wrote about it was because that particular CMBs
Speaker 1: deal had a reported loss of one hundred and twenty percent,
Speaker 1: which was the highest ever recorded for a CMBs deal
Speaker 1: at the time. According to Moody's I'm not even sure
Speaker 1: how you can get a loss above one hundred percent.
Speaker 2: But yeah, I just that's crazy.
Speaker 1: Yeah, I'd have to go back and look at it,
Speaker 1: but yeah, crazy stats. So there was so much to
Speaker 1: pull out of that conversation. One thing that kind of
Speaker 1: surprised me but it makes intuitive sense. Is this idea
Speaker 1: that you know, if you have a property, you kind
Speaker 1: of have to keep putting money into it. And like
Speaker 1: Isa was talking about how with regional malls, if you're
Speaker 1: walking around and you see seasonal decoration, like Christmas decorations,
Speaker 1: that's a good sign. It means someone cares about the property.
Speaker 1: So I guess B class office building should be putting
Speaker 1: up decorations.
Speaker 2: At least put up a wreath. By the way, thanks it.
Speaker 2: I said that our office here didn't have any Instagram walls,
Speaker 2: and then our producer Dash immediately messaged me, and we
Speaker 2: do have a very grammable office. I've grahmmed from here
Speaker 2: fish tanks esque, the curve escalator, so we do have
Speaker 2: plenty of visual delights in our office. But to the conversation,
Speaker 2: I thought that was amazing, and I obviously I really
Speaker 2: liked the I mean, I loved that Liza was able
Speaker 2: to mention so many specific addresses and I could hear
Speaker 2: both once again, both of us type against the same
Speaker 2: time looking up those addresses seventeen forty Broadway, the Money building.
Speaker 2: I didn't it's a interesting Wikipedia page. And then also
Speaker 2: I liked some of the things especially at the end
Speaker 2: the clues you can get from looking at who's who
Speaker 2: in the capitals that in response to your question, just like, Okay,
Speaker 2: you have this sort of untraditional main sponsor, then the
Speaker 2: sort of savvy player at the mes level, they might
Speaker 2: be positioning themselves to take it over at some point.
Speaker 2: That is a I really enjoyed the way she was
Speaker 2: able to bridge both like this sort of the highly
Speaker 2: technical financial stuff as well as just you know, good light.
Speaker 1: Yeah, exactly.
Speaker 3: Yeah.
Speaker 1: We'll have to have Liza on again next year and
Speaker 1: talk some more because there are so many more questions
Speaker 1: that I want to ask her. But for now, shall
Speaker 1: we leave it there?
Speaker 2: Let's leave it there.
Speaker 1: This has been another episode of the Odd Thoughts podcast.
Speaker 1: I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our producers Carmen Rodriguez at Carmen Ermann, Dash, Ol
Speaker 2: Bennett at Dashbod and Kilbrooks at Kelbrooks. Thank you to
Speaker 2: our producer Moses Ondam. For more Odd Lots content, go
Speaker 2: to Bloomberg dot com slash odd Lots, where we have
Speaker 2: transcripts a blog and a newsletter. And if you want
Speaker 2: to talk about dead malls or trophy office buildings or
Speaker 2: anything else real estate, go to our discord Discord, do
Speaker 2: gg slash odd Logs. We have a real estate channel
Speaker 2: in there. Try people be sounded off on the show.
Speaker 1: And if you enjoy All Bobs, if you like it
Speaker 1: when we do deep dives into the office market, then
Speaker 1: please leave us a positive review on your favorite podcast platform.
Speaker 1: Thanks for listening.