WEBVTT - Amazon’s Jassy Says Generative AI Boom Will Be Built on AWS 0:00:00.600 --> 0:00:08.119 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.520 --> 0:00:12.880 This is Bloomberg Business Wait inside from the reporters and 0:00:13.080 --> 0:00:16.640 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.840 global business finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.800 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:28.320 --> 0:00:32.200 Well, Amazon shares hitting their first record since twenty twenty one. 0:00:32.400 --> 0:00:35.760 Amazon CEO Andy Jassiott with a new letter that said 0:00:35.760 --> 0:00:38.440 his company's cloud infrastructure will become an essential part of 0:00:38.479 --> 0:00:42.199 the Jenai boom. He also said Carol that Ai may 0:00:42.240 --> 0:00:44.960 be the largest tech transformation since the cloud. He should 0:00:44.960 --> 0:00:47.520 know a thing or two about the cloud. Andy Jassey 0:00:47.880 --> 0:00:49.600 came from AWS, of course. I mean this is the 0:00:49.600 --> 0:00:52.800 guy you created AWS and that the societal and business 0:00:52.800 --> 0:00:55.440 benefit from Jenai will astound us. 0:00:55.440 --> 0:00:55.600 All. 0:00:55.720 --> 0:00:58.600 Let's get to it. A Spencer Soaper Bloomberg News Technology 0:00:58.680 --> 0:01:01.920 and e commerce reporter, and he was up early out 0:01:01.920 --> 0:01:04.320 there in Seattle covering it all, including the including the 0:01:04.400 --> 0:01:07.200 latest missive from the Amazon and ceo. Hay Spencer always 0:01:07.240 --> 0:01:09.160 good to check in with you. So what do we know? 0:01:09.840 --> 0:01:11.360 What do we need to know about this annual letter 0:01:11.400 --> 0:01:12.080 from jasse. 0:01:13.600 --> 0:01:15.000 They get longer every year. 0:01:15.800 --> 0:01:18.720 Sorry, well said, I love it. 0:01:18.760 --> 0:01:21.360 He's up to he's up to fifty five hundred words, 0:01:22.000 --> 0:01:24.760 but he count this year from from from five thousand 0:01:25.319 --> 0:01:27.920 the previous year and forty five hundred the year before that. 0:01:28.160 --> 0:01:29.839 He's like taking a cue from Jamie Diamond. 0:01:29.880 --> 0:01:31.760 I think that's because it costs nothing. Is glad for 0:01:31.840 --> 0:01:33.200 him to put him up there, all right, he can 0:01:33.240 --> 0:01:34.720 read as much as he wants. 0:01:34.959 --> 0:01:38.520 Yeah, yeah, but uh, I don't know. It was it 0:01:39.200 --> 0:01:42.959 was an interesting letter. It's uh, it doesn't It certainly 0:01:42.959 --> 0:01:47.160 doesn't generate as much buzz as his predecessor's annual letters, 0:01:47.160 --> 0:01:51.320 you know, founder Jeff Bezos. People would really dissect them 0:01:51.320 --> 0:01:54.360 and look for any clues on where Amazon might be headed, 0:01:54.680 --> 0:01:56.920 because it was always seen as just kind of being 0:01:56.960 --> 0:02:01.080 so leading edge. But this one was more like the 0:02:01.120 --> 0:02:03.440 top really just read like an earnings report, just kind 0:02:03.440 --> 0:02:05.400 of going through some highlights and you've got to get 0:02:05.400 --> 0:02:09.079 deep down into the bottom before he starts talking aboutitive 0:02:09.400 --> 0:02:12.680 primitive tools is what he seemed to be highlighting that. 0:02:13.040 --> 0:02:15.280 And I think what he's really trying to address is 0:02:15.320 --> 0:02:17.640 this feeling that maybe is like there's a sentiment that 0:02:17.639 --> 0:02:19.640 maybe Amazon's getting a little bit left behind in the 0:02:19.639 --> 0:02:23.400 AI race to like Microsoft and Google, and he's trying 0:02:23.400 --> 0:02:26.800 to really assert like, look, we're gonna make the infrastructure 0:02:26.840 --> 0:02:30.120 that this stuff, you know, thrives on. And he's really 0:02:30.120 --> 0:02:34.240 trying to draw parallels between their investments and data centers 0:02:33.680 --> 0:02:37.880 and Amazon web services in the cloud with the next 0:02:37.880 --> 0:02:39.400 wave of AI, and that they're going to be in 0:02:39.400 --> 0:02:42.280 a good position to even if they're not out there 0:02:42.280 --> 0:02:45.520 in front publicly, they're gonna be building the tools behind 0:02:45.520 --> 0:02:47.600 the scenes that anyone working in the space is going to. 0:02:47.600 --> 0:02:48.040 Want to use. 0:02:48.120 --> 0:02:50.720 Spencer feels like a one two punch because last night 0:02:50.800 --> 0:02:53.520 at the White House, present Biden and Japanese Prime Minister 0:02:53.520 --> 0:02:56.880 a Fumio Kashida a big state dinner, but they also 0:02:56.919 --> 0:03:00.240 held a press conference. But they are enlisting Amazon an 0:03:00.280 --> 0:03:03.200 Nvidia to fund a new joint AI research program. The 0:03:03.200 --> 0:03:06.480 two nations looking obviously to do better when it comes 0:03:06.480 --> 0:03:10.520 to collaboration around the technology. But it's interesting, Jeff Bezos 0:03:10.560 --> 0:03:13.080 was at that dinner, you know, it does sound like 0:03:13.120 --> 0:03:15.919 they're kind of all out there when it comes to AI. 0:03:16.919 --> 0:03:18.800 I don't know, how do you think about it when 0:03:18.840 --> 0:03:22.040 you report report about this company and kind of its 0:03:22.120 --> 0:03:24.680 role when it comes to artificial intelligence, sounds like the cloud. 0:03:24.680 --> 0:03:26.760 I mean, people are going to need the cloud maybe 0:03:26.760 --> 0:03:29.440 to you know, do some of this machine learning and 0:03:29.520 --> 0:03:31.600 data processing if you will. 0:03:31.760 --> 0:03:33.280 Yeah, I mean it's all it's all going to be 0:03:33.320 --> 0:03:37.280 about like speed and efficiency, cost. And so when when 0:03:37.320 --> 0:03:40.240 I look at as a reporter, I try to ignore 0:03:40.360 --> 0:03:44.960 AI and artificial intelligence just as buzzwords and just figure out, Okay, 0:03:45.000 --> 0:03:47.960 what are what is it enabling you to do? What 0:03:48.080 --> 0:03:51.320 did you used to do, How is it done? How 0:03:51.440 --> 0:03:53.880 is how has that changed? How are you doing it now? 0:03:54.200 --> 0:03:57.680 And for the most part, it's really just automating a 0:03:57.680 --> 0:04:02.000 lot of ROTE tasks, you know. So and and there's 0:04:02.040 --> 0:04:05.400 still always going to need that human element to differentiate. 0:04:05.480 --> 0:04:08.000 Like if everybody's using the same AI tools to do 0:04:08.040 --> 0:04:10.720 the same things, it's all going to look the same, 0:04:10.960 --> 0:04:16.000 you know. So it certainly helps in terms of inputs 0:04:16.120 --> 0:04:20.599 and ROTE tasks, you know, but it's still going to 0:04:20.600 --> 0:04:23.680 require that human element and creativity and things that these 0:04:23.720 --> 0:04:26.960 machines can't do to help people differentiate. 0:04:27.120 --> 0:04:29.120 Spenster ask everyone this, and I haven't had the chance 0:04:29.160 --> 0:04:31.400 to ask you this, but you know, Jasse talked about 0:04:31.440 --> 0:04:36.640 the societal benefit here in your reporting. What are the 0:04:36.680 --> 0:04:40.520 wildest things that are going to benefit society from gen AI. 0:04:43.040 --> 0:04:45.880 I think that just the processing of vast amounts of 0:04:45.880 --> 0:04:49.480 information is always the thing in spotting trends and stuff 0:04:49.480 --> 0:04:53.360 and doing it efficiently, you know, rather than having someone 0:04:53.440 --> 0:04:56.200 else do it. There's always this kind of framework of 0:04:57.200 --> 0:05:00.279 math and calculation that has to be done when it 0:05:00.320 --> 0:05:02.600 comes to breakthroughs. But the more you can delegate that 0:05:02.640 --> 0:05:05.159 to machines, you know, just the more you can focus 0:05:05.200 --> 0:05:08.440 on and target your efforts and energy. So I think 0:05:08.480 --> 0:05:10.400 that's a lot of it is just you know, just 0:05:10.720 --> 0:05:15.000 processing data and that sort of thing to read trends. 0:05:15.040 --> 0:05:19.000 But in terms of like life changing breakthroughs, I just 0:05:20.400 --> 0:05:23.120 I haven't seen it, you know, you know. I imagine 0:05:23.120 --> 0:05:25.919 we'll be there and we'll look backward and recognize it. 0:05:25.960 --> 0:05:28.200 But right now, which it is hard to it's hard 0:05:28.200 --> 0:05:29.359 to see the forest through the trees. 0:05:29.480 --> 0:05:31.440 Carol's still waiting for the robot that does dishes. 0:05:31.800 --> 0:05:33.919 Yeah, you know, that's all I'm asking for and like 0:05:34.000 --> 0:05:35.440 kind of figures out what we need to do around 0:05:35.480 --> 0:05:36.640 the home and just takes care of it. 0:05:36.800 --> 0:05:37.400 I'm with you. 0:05:37.800 --> 0:05:40.360 I'd like to get rid of my to do list Spencer, 0:05:40.400 --> 0:05:43.200 thank you so appreciate it. Spencer Soper, He's Bloomberg News 0:05:43.200 --> 0:05:46.960 Technology and e Commerce reporter, joining us out in Seattle 0:05:47.000 --> 0:05:50.159 or Seattle Bureau. Check him out though on x at 0:05:50.200 --> 0:05:51.120 Spencer Soaper. 0:05:52.160 --> 0:05:55.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:05:55.720 --> 0:05:58.960 live weekday afternoons from two to five pm Eastern. Listen 0:05:59.000 --> 0:06:01.680 on Apple, card Play and Bright Auto with a Bloomberg 0:06:01.720 --> 0:06:04.880 Business act or want us live on YouTube. 0:06:06.800 --> 0:06:07.000 Well. 0:06:07.000 --> 0:06:09.160 Among our most read stories on the Bloomberg Today, it's 0:06:09.200 --> 0:06:13.640 specifically about Manhattan apartment rents unexpectedly declining in March after 0:06:13.800 --> 0:06:16.880 months of increases, though it's unlikely to be a sign 0:06:16.920 --> 0:06:18.000 of a softening market. 0:06:18.440 --> 0:06:21.160 Yeah, the first time in four months that rents fell 0:06:21.240 --> 0:06:23.960 on an annual basis, and an unusual twist at the 0:06:23.960 --> 0:06:26.159 tail end of winter, when prices tend to begin climbing 0:06:26.160 --> 0:06:29.800 toward their traditional summertime peaks. Carol our next guest understands 0:06:29.839 --> 0:06:33.160 the Manhattan residential market, having represented buyers and sellers for 0:06:33.160 --> 0:06:34.160 more than thirty years. 0:06:34.160 --> 0:06:36.160 All right, let's get to our interview. Back with us 0:06:36.200 --> 0:06:38.880 is Louise Phillips Forbes real estate broker at Brown Harris 0:06:38.920 --> 0:06:42.120 Stevens joining us here in studio. Nice to have you here. 0:06:42.640 --> 0:06:45.200 How are you? First quarter just wrapped up? How was 0:06:45.240 --> 0:06:45.919 it for you guys? 0:06:46.560 --> 0:06:49.360 Well, not for everybody, but I feel like I'm very 0:06:49.360 --> 0:06:51.840 blessed in that I had a very strong quarter with 0:06:52.080 --> 0:06:58.280 twenty nine transactions and exceeding almost ninety million, and you know, 0:06:58.480 --> 0:07:02.080 and it's still coming. I mean, those rents dropped because 0:07:02.360 --> 0:07:03.120 people are buying. 0:07:03.600 --> 0:07:05.520 How does it compare? I always think about this with 0:07:05.960 --> 0:07:09.520 like the past year, how it compares with the pandemic? 0:07:09.560 --> 0:07:11.360 How compares with the pre pandemic? 0:07:12.040 --> 0:07:14.760 You know, I think what I would say to you 0:07:14.880 --> 0:07:16.880 is that there's only so long people are going to 0:07:16.960 --> 0:07:20.080 put their life on hold. They were so many individuals 0:07:20.080 --> 0:07:23.160 that were prevented from buying a home that we kind 0:07:23.200 --> 0:07:26.040 of had a wonky market in twenty eighteen and part 0:07:26.040 --> 0:07:30.880 of nineteen and twenty twenty. In January was strong, started 0:07:30.920 --> 0:07:33.280 to be strong, and then we had the pandemic. So, 0:07:33.680 --> 0:07:36.200 not to mention the pandemic, there's also the cause and 0:07:36.240 --> 0:07:40.760 effect of interest rates in inflation. So people are not 0:07:40.920 --> 0:07:43.640 going to wait anymore, especially in a vertical market like 0:07:43.680 --> 0:07:44.080 New York. 0:07:44.480 --> 0:07:47.120 So what's happening in your segment right now? Because you 0:07:47.200 --> 0:07:51.080 have a unique window into what's going on in residential 0:07:51.120 --> 0:07:53.680 real estate. You certainly do have a diverse clientele, but 0:07:53.960 --> 0:07:56.240 let's be honest, there are people with lots and lots 0:07:56.240 --> 0:07:58.440 of money who are buying very expensive property. 0:07:58.520 --> 0:08:03.000 Yes, I mean literally, one week in March represented five 0:08:03.080 --> 0:08:06.440 hundred and fifty five million dollars worth of contract science. 0:08:07.680 --> 0:08:11.080 That's one week. That is quite powerful. And when you 0:08:11.360 --> 0:08:13.720 I said to you just earlier, like you know something's 0:08:13.800 --> 0:08:16.560 going on in the market when off market deals are 0:08:16.600 --> 0:08:19.560 done for seventy two million dollars in the West Village. 0:08:19.280 --> 0:08:20.760 So what is going on in the market. 0:08:21.680 --> 0:08:22.240 I think that. 0:08:22.240 --> 0:08:26.120 There is a confidence in our economy. I think that 0:08:26.760 --> 0:08:28.920 you know we're not going to have you know, we 0:08:28.960 --> 0:08:31.120 have an election year, so you start to hear the rumbles. 0:08:31.400 --> 0:08:32.920 I'm going to wait till after that. I don't think 0:08:32.920 --> 0:08:35.560 people are going to wait because they are There's so 0:08:35.600 --> 0:08:39.040 many other circumstances that have prevented people from leaning into 0:08:39.040 --> 0:08:43.440 this market. So I am expecting this to continue. And 0:08:43.760 --> 0:08:46.520 my advice to my buyers is don't be late to 0:08:46.559 --> 0:08:50.120 the party, and you have to start looking for the 0:08:50.240 --> 0:08:53.839 right home, not the right deal. And if you think 0:08:53.960 --> 0:08:57.920 with your heart before your head. You will find yourself 0:08:57.960 --> 0:09:00.000 being an owner instead of paying somebody else's more. 0:09:00.559 --> 0:09:03.760 Having said that, right, we all remember like a pandemic, 0:09:04.360 --> 0:09:07.520 just various properties in multiple bids, especially outside kind of 0:09:07.520 --> 0:09:11.559 major metropolitan cities. Who's got the upper hand right now? 0:09:11.600 --> 0:09:13.040 Is it buyers or sellers at this point? 0:09:13.200 --> 0:09:17.480 Viz Well, I think in vertical cities like New York 0:09:17.679 --> 0:09:20.640 that did not have a collapse in the market, but 0:09:20.760 --> 0:09:23.400 a pause in the market during it was a difficult time. 0:09:23.520 --> 0:09:27.400 I mean, we saw forty percent less transactions last year 0:09:27.400 --> 0:09:30.720 in twenty twenty three when we had people not making 0:09:30.760 --> 0:09:33.120 decisions for that period of time where interest rates and 0:09:33.120 --> 0:09:37.560 inflation was doing their dance. But you know, I will 0:09:37.600 --> 0:09:42.320 say that we are in a housing market crisis across 0:09:42.400 --> 0:09:48.479 the nation. Places like think about Nashville, Austin, Darien, Connecticut. 0:09:48.480 --> 0:09:51.680 There's seven listings on the market in Darien, where compared 0:09:51.720 --> 0:09:55.480 to one hundred and seventeen you know, ten years ago, 0:09:55.960 --> 0:09:58.320 where are people going? And that's a cause and effect 0:09:58.400 --> 0:10:02.000 still shaking out from the pandem where people that market 0:10:02.120 --> 0:10:03.720 surged thirty five percent. 0:10:04.080 --> 0:10:08.080 Right, So, but is this the new normal because we're 0:10:08.080 --> 0:10:10.520 not going back to that era of zero rates anytime 0:10:10.600 --> 0:10:13.560 soon at least no look never say never, but all 0:10:13.720 --> 0:10:14.840 all signs points that that's not. 0:10:15.160 --> 0:10:17.560 I do think that we're going to have interest rates 0:10:17.840 --> 0:10:21.880 pull back continued to support our economy, but it's not 0:10:21.920 --> 0:10:24.640 going to be the zero rates. But let's be clear, 0:10:25.880 --> 0:10:28.719 when you're paying five or seven or six percent, you're 0:10:28.760 --> 0:10:31.000 making a lot more money in the bank with money 0:10:31.040 --> 0:10:35.079 in the bank. And when I had a three percent 0:10:35.200 --> 0:10:38.480 interest rate, I wasn't getting paid but fifty basis points 0:10:38.480 --> 0:10:40.120 on the money that I had in my bank account. 0:10:40.120 --> 0:10:41.800 So it all depends on how you choose to look 0:10:41.840 --> 0:10:45.240 at it. And I do think that as interest rates 0:10:45.280 --> 0:10:48.160 pull back, even if they just go to five percent, 0:10:48.880 --> 0:10:49.920 prices are going to go up. 0:10:49.920 --> 0:10:52.200 We're not there. We've got mortgage rates in the US 0:10:52.280 --> 0:10:54.760 rising for a second straight week, average thirty year fixed 0:10:54.840 --> 0:10:57.640 loan six point eight eight percent, up from six point 0:10:57.679 --> 0:11:00.520 eight two percent last week, and it's not a level 0:11:00.520 --> 0:11:04.480 reached in early March. Your buyers, So higher rates impact 0:11:04.559 --> 0:11:07.440 your buyers, give us remind us of you know, sometimes 0:11:07.440 --> 0:11:10.240 we bring in people like they're cash buyers. They're good. 0:11:10.520 --> 0:11:13.559 Well, it forced a lot of cash deals last year 0:11:13.760 --> 0:11:15.959 because they were the ones they were getting the deals. 0:11:16.240 --> 0:11:19.280 Cash was always king, but in the market where people 0:11:20.160 --> 0:11:22.720 are priced out of it, that's why interest rates. With 0:11:22.840 --> 0:11:26.760 interest rates up, the rental market surged, particularly the one 0:11:26.760 --> 0:11:29.280 bedroom market. If you're looking to buy a million dollar 0:11:29.320 --> 0:11:32.240 one bedroom and you can afford five thousand dollars a 0:11:32.320 --> 0:11:35.199 month for your one bedroom, you're pushing the thirty eight 0:11:35.280 --> 0:11:38.600 hundred dollars COVID deal out of the rental market because 0:11:38.640 --> 0:11:39.520 you'll pay forty five. 0:11:39.880 --> 0:11:41.640 But so, who is your customer, like, give us an 0:11:41.640 --> 0:11:43.439 idea of like a typical I hate to say that, 0:11:43.440 --> 0:11:47.320 because it's probably not a typical transaction. Well, I think 0:11:47.320 --> 0:11:48.640 that the majority I do. 0:11:48.880 --> 0:11:51.560 I mean, I would say I do from twenty million 0:11:51.600 --> 0:11:55.680 dollars to seven hundred thousand. So I am over the game. 0:11:55.720 --> 0:11:58.560 I'm all over the game. I'm the majority of the deals. 0:12:00.679 --> 0:12:06.600 Five probably, and most of them are taking mortgages. And 0:12:06.800 --> 0:12:08.960 there was a period of time where people saw the 0:12:09.040 --> 0:12:12.840 value in buying the rate down and paying fifty thousand dollars. 0:12:13.280 --> 0:12:17.280 Interest only loans are opportunities and choices. People like myself. 0:12:17.320 --> 0:12:20.880 I'm commission only, so when I flush fifty thousand dollars, 0:12:20.920 --> 0:12:23.160 I can buy down my mortgage and adjust my rate 0:12:23.280 --> 0:12:24.360 right there in real time. 0:12:25.000 --> 0:12:27.199 Hey, speaking of commissions, got to ask about the National 0:12:27.200 --> 0:12:31.400 Association of Realtors in the settlement reached last month. What 0:12:31.440 --> 0:12:35.000 does that do to You're a business person, you're an 0:12:35.000 --> 0:12:37.880 independent contractor. I mean, commissions is how you make money. 0:12:37.920 --> 0:12:40.400 Does that affect the way you're getting paid? 0:12:40.960 --> 0:12:41.240 Well, we. 0:12:43.000 --> 0:12:47.280 Markets like New York are not quite like the mls 0:12:47.480 --> 0:12:52.400 outside and across the nation how that works. But you know, look, 0:12:52.400 --> 0:12:58.320 I think it's all a matter of transparency, about educating 0:12:58.360 --> 0:13:03.840 and talking and listen. I believe that it's very important 0:13:03.880 --> 0:13:06.800 for people to understand who they represent and that what 0:13:06.880 --> 0:13:10.400 their choices are. And I will be that person till 0:13:10.440 --> 0:13:12.880 I'm in my grave telling people the value that I'm 0:13:12.920 --> 0:13:15.760 supposed to be bringing to the table, and people have 0:13:15.960 --> 0:13:18.720 historically never had a problem with paying for that. I 0:13:18.720 --> 0:13:21.679 think it's really just about the transparency. I'm not quite 0:13:21.720 --> 0:13:23.400 sure how the cause and effect is going to be. 0:13:23.559 --> 0:13:26.880 We are proactively starting to talk to all of our 0:13:26.920 --> 0:13:29.800 relationships because they need to understand this is a change. 0:13:29.880 --> 0:13:32.240 It's probably coming down to the pipe to us. I 0:13:32.240 --> 0:13:34.360 don't think it's going to affect us the same way 0:13:34.760 --> 0:13:37.040 it will outside of the city. But that's still part 0:13:37.040 --> 0:13:38.160 of the arm of our company. 0:13:38.240 --> 0:13:40.199 Ten seconds on pricing, prices going up? 0:13:41.080 --> 0:13:42.480 I think they're still strong. 0:13:42.640 --> 0:13:45.280 Yes, they're still strong. Are they still going up? 0:13:45.960 --> 0:13:49.120 I think that there are pockets of opportunity, and it 0:13:49.160 --> 0:13:51.080 depends on how long they've been on the market, and 0:13:51.120 --> 0:13:54.600 if sellers will allow the brokers to price their homes 0:13:54.679 --> 0:13:58.480 instead of themselves and pricing from yesterday, they're going to 0:13:58.520 --> 0:13:59.439 make those transactions. 0:14:00.000 --> 0:14:02.640 Shot as Zoeys Louise Phillips Forbes real estate broker at 0:14:02.679 --> 0:14:05.880 Brown Harris T. Stevens. Of course joining us in studio. 0:14:07.640 --> 0:14:11.520 You're listening to the Bloomberg Business Week podcast. Listen live 0:14:11.600 --> 0:14:14.800 each weekday starting at two pm Eastern on applecar Play 0:14:14.840 --> 0:14:17.679 and Android Auto with the Bloomberg Business ad. You can 0:14:17.720 --> 0:14:20.960 also listen live on Amazon Alexa from our flagship New 0:14:21.040 --> 0:14:25.000 York station, Just Say Alexa playing Bloomberg eleven thirty. 0:14:26.440 --> 0:14:29.640 Well Big Deal. This week, Blackstone struck a roughly ten 0:14:29.720 --> 0:14:32.440 billion dollars deal for an apartment landlord in the latest 0:14:32.480 --> 0:14:34.880 sign at the real estate investor sees a right moment 0:14:34.920 --> 0:14:37.040 to pour money into the property market. 0:14:37.120 --> 0:14:40.080 And in February, Bloomberg reporting on Predium, the largest single 0:14:40.080 --> 0:14:43.440 family landlord in the US and that it was planning 0:14:43.600 --> 0:14:47.280 new housing bets on apartment properties. The firm also recently 0:14:47.320 --> 0:14:50.520 sold a stake to hunter Point Capital as it seeks 0:14:50.640 --> 0:14:52.440 financial muscle for new initiatives. 0:14:52.520 --> 0:14:53.920 Wenew, we want to know more, So with more and 0:14:53.960 --> 0:14:56.520 what Predium is up to. Back with us is ROBERTA. Goss. 0:14:56.560 --> 0:14:58.640 She's senior managing director, head of the bank, loan and 0:14:58.720 --> 0:15:02.280 COLO platform at Predium. She's joining us here in our 0:15:02.280 --> 0:15:05.360 Bloomberg Interactior broker studio. By the way, Predium has some 0:15:05.400 --> 0:15:07.840 fifty one point eight billion in assets under management. You 0:15:07.920 --> 0:15:10.760 know them. They're focused on US residential real estate, residential credit, 0:15:10.760 --> 0:15:13.320 and corporate credits. So all right, related out there, how 0:15:13.360 --> 0:15:14.560 are you great? 0:15:14.720 --> 0:15:15.760 We've been really busy. 0:15:15.920 --> 0:15:17.920 Well, tell us about that. What does that mean for 0:15:17.960 --> 0:15:19.000 you and what specifically? 0:15:19.400 --> 0:15:24.160 So as a firm, we've been very focused on what 0:15:24.200 --> 0:15:27.640 opportunities are coming and through the dislocation that we really 0:15:27.680 --> 0:15:33.520 see as a result of regional banks pulling back. And 0:15:33.800 --> 0:15:37.760 I think that speaks to the strategic investments we've made 0:15:38.040 --> 0:15:41.080 and the fact that we really think we're going to 0:15:41.080 --> 0:15:45.760 be extending into new areas in single family rental. We're 0:15:45.760 --> 0:15:50.720 extending now into multifamily with the acquisition of BH which 0:15:50.760 --> 0:15:54.720 is unique for us and terrific. And then on the 0:15:56.040 --> 0:16:01.120 rezidet side, we think also a potential big opportunity as 0:16:01.160 --> 0:16:05.520 we move forward, So extending from resie mortgages into commercial 0:16:05.600 --> 0:16:09.280 debt where we think there'll be a dislocation opportunity. 0:16:09.320 --> 0:16:11.120 What did that dislocation look like? 0:16:12.200 --> 0:16:18.160 So really more on the commercial side and focused on 0:16:18.680 --> 0:16:22.800 really the senior levels of debt within within commercial real estate. 0:16:22.880 --> 0:16:24.400 Well, what kind of deals are getting done? So like 0:16:24.480 --> 0:16:26.600 walk us through some of the financial structures that we're seeing. 0:16:26.680 --> 0:16:28.240 And I know it's hard to kind of jump everything 0:16:28.240 --> 0:16:30.560 at a big bucket, but give us an idea. I 0:16:30.560 --> 0:16:32.360 guess what we're trying to do is right, the deals 0:16:32.400 --> 0:16:35.040 tell us to some extent, who's in the driver's seat 0:16:35.480 --> 0:16:39.440 or how much someone coming off of the concerns, the 0:16:39.480 --> 0:16:41.480 woes if you will have the regional banking sector, and 0:16:41.480 --> 0:16:43.320 how other people have come in. But I'm curious about 0:16:43.320 --> 0:16:45.040 what kind of deals then are being done. 0:16:45.320 --> 0:16:53.960 Yeah, So for us, it's really opportunities in multi family 0:16:54.120 --> 0:17:01.120 coming from you know, ownership of properties that need to 0:17:01.160 --> 0:17:01.960 be refinanced. 0:17:02.360 --> 0:17:04.960 So under pressure, under duress. 0:17:04.560 --> 0:17:08.080 I wouldn't I would say, not yet, but we're expecting 0:17:09.240 --> 0:17:12.320 more dress as we as we go through the next 0:17:12.320 --> 0:17:18.560 couple of years, so refinancing opportunities and the need for 0:17:18.880 --> 0:17:23.159 new sources, and I think this will move from the 0:17:23.200 --> 0:17:29.840 banks to more private, private debt and private asset management opportunities. 0:17:30.040 --> 0:17:32.119 You mentioned the opportunities arising in the wake of the 0:17:32.119 --> 0:17:35.359 stress on regional banks, specifically what we saw in March 0:17:35.359 --> 0:17:38.159 of last year. I'm wondering if you think that the 0:17:38.160 --> 0:17:43.080 stress on regional banks is over, I think. 0:17:42.920 --> 0:17:47.080 That's really hard to call. I'd say, uh, you know, 0:17:47.320 --> 0:17:51.600 when we looked at you know, Silicon Valley Bank a 0:17:51.640 --> 0:17:54.359 year ago, you would have said, okay, we're you know, 0:17:54.400 --> 0:17:59.560 that was a unique, uh situation. We've seen other banks 0:18:00.520 --> 0:18:03.720 you know, have to pull back and shore up capital 0:18:03.760 --> 0:18:05.240 over the course of the last year. So I think 0:18:05.240 --> 0:18:08.720 it's very difficult to call. I think, you know, we're 0:18:08.840 --> 0:18:14.440 just believe that there's a broader opportunity as the regional banks, 0:18:15.000 --> 0:18:17.359 you know, over the next five to ten years really 0:18:17.400 --> 0:18:19.639 start to shrink to retrench. 0:18:19.840 --> 0:18:23.280 Also in terms of is it it's interesting because I 0:18:23.320 --> 0:18:25.040 know Bloomberg going to think it was our Patrick Clark 0:18:25.080 --> 0:18:27.480 reporter back in February you guys were extending credit to 0:18:27.480 --> 0:18:30.840 homebuilders because of the void that was created by the 0:18:30.880 --> 0:18:34.920 regional banks as they were retreating back. So how would 0:18:35.000 --> 0:18:38.320 you kind of characterize that level of activity. You said 0:18:38.320 --> 0:18:42.200 you're very busy. Is it give us an idea exponentially, 0:18:42.240 --> 0:18:44.040 like in the last six months or something, how much 0:18:44.040 --> 0:18:44.960 it's increased. 0:18:45.520 --> 0:18:48.040 Well, I think from our perspective in terms of being 0:18:48.080 --> 0:18:51.880 really busy, we've positioned ourselves strategically to be set up 0:18:51.920 --> 0:18:54.080 for all of these opportunities. 0:18:53.359 --> 0:18:54.080 Whoever needs it. 0:18:54.560 --> 0:18:59.000 Right, we had been very active with the home builders 0:18:59.119 --> 0:19:01.720 now for a cup of years and. 0:19:02.560 --> 0:19:04.920 When you guys did well off the great financial crisis, 0:19:05.000 --> 0:19:06.840 right when it came to residential. 0:19:06.680 --> 0:19:11.639 Yes, opportunities down started the firm in twenty twelve, really, 0:19:11.680 --> 0:19:14.919 as you know, with a view that there was a 0:19:14.920 --> 0:19:19.840 structural shortage of homes in the United States, and that 0:19:19.960 --> 0:19:24.120 has allen your founder, the founder, Don Mullen, and that 0:19:24.960 --> 0:19:29.960 really hasn't resolved. It's probably became become more amplified as 0:19:30.040 --> 0:19:32.879 we go, you know, over the last decade twelve years, 0:19:33.840 --> 0:19:37.199 and we think that that's still an opportunity and going 0:19:37.240 --> 0:19:38.200 to continue to be one. 0:19:38.440 --> 0:19:40.880 So you don't think that will get resolved anytime soon. 0:19:41.520 --> 0:19:42.800 The structural Yeah. 0:19:42.880 --> 0:19:44.280 And the reason I ask is because there are some 0:19:44.320 --> 0:19:46.399 folks out there who are arguing, you know, it's getting 0:19:46.440 --> 0:19:49.640 so bad that we're starting to see actual zoning changes 0:19:50.080 --> 0:19:53.800 in some towns and municipalities, which you know, when it 0:19:53.800 --> 0:19:58.280 comes to people who fight these sorts of things, they're 0:19:58.560 --> 0:20:00.760 starting to give in in some areas because they realized 0:20:00.800 --> 0:20:03.320 that the housing crisis is so bad. 0:20:04.119 --> 0:20:06.959 Well, I think that what we're trying to do is 0:20:07.480 --> 0:20:12.840 solve for this problem. And I think our relationship with 0:20:12.880 --> 0:20:17.520 the homebuilders really goes to that. We're trying to, you know, 0:20:17.880 --> 0:20:22.960 fix what we think is you know, a nationwide issue 0:20:24.600 --> 0:20:29.639 and partner with the right either municipalities or home builders 0:20:29.760 --> 0:20:36.400 or financial partners that are trying to solve for this shortage. 0:20:36.480 --> 0:20:39.280 I wonder to Roberta, are there certain geographic areas where 0:20:39.280 --> 0:20:41.440 you guys are finding more opportunities than elsewhere. 0:20:41.800 --> 0:20:46.920 Well, we've been almost exclusively focused on the Sun Belt, 0:20:47.520 --> 0:20:50.199 and that has been everybody loves the sun Pias. So 0:20:50.760 --> 0:20:57.240 from uh, you know, Arizona through through to Florida and 0:20:57.560 --> 0:21:00.199 you're going to stay there or I think for now 0:21:00.320 --> 0:21:05.000 that's where our resources are really concentrated. And I think 0:21:05.640 --> 0:21:09.560 through COVID we've seen a lot of migration to those areas. 0:21:10.640 --> 0:21:13.840 Three family members too, though, kind of like just before 0:21:13.880 --> 0:21:15.520 COVID and then another one after COVID. 0:21:15.560 --> 0:21:17.960