WEBVTT - Meta’s Threads App Draws Millions 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.760 --> 0:00:22.680 Carol, you know that I am so excited to talk 0:00:22.720 --> 0:00:25.959 about this story. It's a mon our, most read obviously, 0:00:26.040 --> 0:00:29.200 it's among the most talked about on none other platform 0:00:29.240 --> 0:00:32.400 than Twitter. We're talking about Meta's new app, Threads, the 0:00:32.479 --> 0:00:35.920 rhinebol to Twitter, right, real threat to Elon Musk and 0:00:36.000 --> 0:00:39.159 his social media platform that's already been struggling quite a 0:00:39.159 --> 0:00:42.760 bit since he perhaps overpaid just a touch according to 0:00:42.800 --> 0:00:46.000 some for the platform. Someone who knows the company very 0:00:46.080 --> 0:00:48.519 very well is joining us to discuss this. We've got 0:00:48.560 --> 0:00:52.000 Bloomberg News Big Tech team leader Sarah Fryar, also the 0:00:52.040 --> 0:00:55.640 author of No Filter, The Inside Story of Instagram, and 0:00:55.680 --> 0:00:58.520 she joins us from the San Francisco Bureau. Sarah, thanks 0:00:58.560 --> 0:01:02.080 so much for coming on, and uh, pick your poison 0:01:02.120 --> 0:01:04.080 for me here in terms of hot takes to tell 0:01:04.120 --> 0:01:06.319 me about Threads, what do we need to know? 0:01:07.440 --> 0:01:11.320 I mean, the most incredible thing is just the amount 0:01:11.440 --> 0:01:14.400 of attention. It's getting the amount of people who who 0:01:14.480 --> 0:01:17.440 actually wanted Meta to copy a product this time and 0:01:17.760 --> 0:01:21.840 are signing up and trying it out, and the engagement there, 0:01:22.440 --> 0:01:25.880 the amount of people who are are posting and replying 0:01:25.959 --> 0:01:29.000 and following people like there is there is pent up 0:01:29.040 --> 0:01:31.600 demand for this thing, which is which you know, I 0:01:31.640 --> 0:01:33.880 expect it a little bit, but to see it in 0:01:33.959 --> 0:01:37.400 action is another thing. And then and then you know, 0:01:37.840 --> 0:01:42.440 it just goes to show that having that existing network, 0:01:42.520 --> 0:01:45.600 that existing Instagram network that they can connect to this 0:01:45.680 --> 0:01:50.919 new product really made a difference. We've seen so many 0:01:51.240 --> 0:01:54.840 Twitter competitors, We've seen Blue Sky mass it on posts 0:01:54.880 --> 0:01:58.920 t too. Like the list goes on, and this is 0:01:58.920 --> 0:02:01.200 the one where people don't have to do as much 0:02:01.320 --> 0:02:05.480 work to get started because they can port over what 0:02:05.480 --> 0:02:08.640 they already have from Instagram, and that barrier to entry 0:02:08.760 --> 0:02:12.960 is really making a big difference. Frustrating some people for sure, 0:02:13.080 --> 0:02:16.600 but for others, cutting down the time to make this 0:02:16.880 --> 0:02:19.000 useful by a lot. 0:02:19.360 --> 0:02:21.320 Well, Sara, you bring up such a great point that 0:02:21.400 --> 0:02:24.640 this is perhaps the first time that people wanted Meta 0:02:24.680 --> 0:02:27.680 to copy something. Obviously, what comes to mind is when 0:02:27.720 --> 0:02:31.960 they copied Snapchat through Instagram Stories, rolling out. This has 0:02:32.000 --> 0:02:34.560 happened time and time again with them. What do you 0:02:34.560 --> 0:02:38.600 think was the catalyst behind users being so excited about 0:02:38.639 --> 0:02:42.640 this copycat move? Is it because of Elon's takeover of Twitter? 0:02:42.800 --> 0:02:45.480 Or have people been itching for a better version of 0:02:45.520 --> 0:02:46.640 Twitter for a while. 0:02:46.400 --> 0:02:50.280 Now it's because of the takeover, no doubt, I mean, 0:02:51.000 --> 0:02:52.959 and that is what I've been hearing from my sources, 0:02:53.040 --> 0:02:56.840 is it came down to the celebrities and brands and 0:02:57.200 --> 0:03:00.560 folks who were relying on Twitter who have become solutions 0:03:00.560 --> 0:03:03.880 with a lot of the changes that Musk has has 0:03:03.960 --> 0:03:08.240 brought upon it, whether it's it's technical difficulties, like over 0:03:08.280 --> 0:03:10.880 the weekend he was limiting the amount of posts that 0:03:10.919 --> 0:03:13.360 people could see. There are still rate limits on Twitter, 0:03:14.800 --> 0:03:18.320 or the content moderation changes. He's losing the rules. He's 0:03:18.360 --> 0:03:23.240 made it more possible to see violent content, content that 0:03:23.280 --> 0:03:27.640 could be harmful or hateful, and people don't Brands, for one, 0:03:27.800 --> 0:03:30.440 don't want to be in that kind of environment, and 0:03:30.639 --> 0:03:34.239 they've been asking Meta for an alternative. So here we are. 0:03:34.600 --> 0:03:37.520 And I think that building off Instagram is smart because 0:03:37.520 --> 0:03:40.440 on Instagram you do have those two billion users and 0:03:40.480 --> 0:03:44.520 you have that existing network of public figures, celebrities, influencers, 0:03:44.760 --> 0:03:47.520 people in the music industry and the sports industry that 0:03:47.600 --> 0:03:52.280 can all easily pourt over to Threads as a starting 0:03:52.960 --> 0:03:56.720 light for this new community. The big thing that we're 0:03:56.720 --> 0:04:00.520 looking at now is not just does the launch because 0:04:00.520 --> 0:04:05.000 it's possible to get a launch right and create a fad, 0:04:05.760 --> 0:04:08.680 but does it create a habit when you have news 0:04:08.720 --> 0:04:11.240 to share, when you have a thought, when you have 0:04:11.280 --> 0:04:13.920 a good meme, are you opening up Twitter first or 0:04:13.960 --> 0:04:15.960 are you opening up Threads or neither? 0:04:15.960 --> 0:04:16.200 Are you? 0:04:16.279 --> 0:04:17.960 Are you just over this now? 0:04:18.160 --> 0:04:21.960 So Sar for someone who really understands this space, I mean, 0:04:22.640 --> 0:04:24.560 how do you see it? And I'm assuming you've played 0:04:24.560 --> 0:04:26.960 with threads? So give us an idea of what it's 0:04:27.120 --> 0:04:30.480 like and could it possibly be a real threat to Twitter? 0:04:31.560 --> 0:04:35.680 Well, I definitely think that it could, not just because 0:04:36.000 --> 0:04:40.360 of the Twitter users coming over, but because they're also 0:04:40.720 --> 0:04:43.840 answering a need that I think Instagram and Meta users 0:04:43.880 --> 0:04:46.240 have right now. If you think about how Meta and 0:04:46.320 --> 0:04:49.880 Instagram if sorry, Facebook and Instagram have changed over the 0:04:49.880 --> 0:04:53.120 past couple of years, It's become more about content from 0:04:53.160 --> 0:04:56.240 people that you don't follow, who aren't your friends. It's 0:04:56.240 --> 0:04:59.360 become more about video more about reels, those short form 0:04:59.440 --> 0:05:02.000 videos that are meant to copy TikTok. It's more of 0:05:02.040 --> 0:05:06.800 a passive experience. It's more about entertainment. And so the 0:05:06.880 --> 0:05:11.080 thing that excites me about Threads is it a place 0:05:11.120 --> 0:05:15.000 where people can actually share their thoughts again on social media, 0:05:15.200 --> 0:05:19.120 and sharing your thoughts on social media only works to 0:05:19.160 --> 0:05:22.680 a certain point when people have communities that are nice 0:05:22.680 --> 0:05:26.480 and small, like they used to have on Instagram and Facebook. 0:05:27.160 --> 0:05:29.960 It's very easy to be personal. But when your community 0:05:29.960 --> 0:05:34.320 balloons into you know, thousands of people, then you don't 0:05:34.360 --> 0:05:37.880 want to be personal anymore, and especially as you start 0:05:37.920 --> 0:05:43.920 to use those those profiles for professional reasons. I think 0:05:43.960 --> 0:05:46.920 that a lot of activity has been moving to group chat, 0:05:47.240 --> 0:05:50.360 and then that kind of more public facing activity I 0:05:50.400 --> 0:05:51.560 think will move to Threads. 0:05:51.920 --> 0:05:54.880 Yeah, it's like once the adults enter, it no longer 0:05:54.920 --> 0:05:57.160 becomes a safe space, which is what we've seen TikTok 0:05:57.240 --> 0:05:59.839 kind of be used for. Sarah talk to me about 0:05:59.839 --> 0:06:02.599 what happens if Threads goes the way of Facebook and 0:06:02.640 --> 0:06:06.880 sort of becomes seen as a platform for people who 0:06:07.040 --> 0:06:10.880 are perhaps in an older demographic to kind of air 0:06:10.920 --> 0:06:13.760 out their hot takes on politics and things like that. 0:06:13.800 --> 0:06:16.799 Do you foresee that happening? And how is meta gonna 0:06:16.800 --> 0:06:17.520 hedge against that? 0:06:18.560 --> 0:06:18.720 Well? 0:06:18.760 --> 0:06:22.720 I think I think Listen, every network has a demographic 0:06:22.720 --> 0:06:25.480 that they start with, and I think right now, because 0:06:26.160 --> 0:06:29.640 Threads is built off of Instagram, it's going to very 0:06:29.640 --> 0:06:31.240 closely mirror who uses Instagram. 0:06:31.279 --> 0:06:34.920 Excuse me, Yeah, that's a really good point. Actually, because 0:06:34.920 --> 0:06:37.279 the users are younger, they might be they might be 0:06:37.320 --> 0:06:40.560 able to kind of keep the Instagram audience as opposed 0:06:40.600 --> 0:06:43.800 to catching more of the Facebook audience, which is aiming 0:06:43.839 --> 0:06:44.839 a little bit older. 0:06:44.920 --> 0:06:47.559 So I do think that Instagram is becoming a little 0:06:47.560 --> 0:06:51.760 bit older, It is becoming more of a a you know, 0:06:52.160 --> 0:06:57.680 millennial demographic place. But a new program, a new place 0:06:57.760 --> 0:07:00.479 to share is always going to catch on with people 0:07:00.480 --> 0:07:02.000 who want to build a following. 0:07:02.440 --> 0:07:04.359 But I do wonder, you know, it's interesting because I 0:07:04.440 --> 0:07:07.800 think about, you know, Maddie, that we're so entrenched on 0:07:07.839 --> 0:07:10.480 the news business that Twitter is fun. I find it 0:07:10.520 --> 0:07:13.680 really fun and helpful when when stories are coming out, 0:07:13.720 --> 0:07:17.960 And I do wonder, you know, Sarah, would potentially Threads 0:07:18.040 --> 0:07:21.720 be as useful in that regard for folks like us. 0:07:22.760 --> 0:07:26.600 Well, that all comes down to the habit that we build. 0:07:26.720 --> 0:07:30.400 If people start sharing news there, if they start sharing 0:07:30.440 --> 0:07:32.440 their insights there, if that becomes a place that we 0:07:32.480 --> 0:07:35.520 have to go see competitors and what they're doing, we 0:07:35.600 --> 0:07:36.280 will be there too. 0:07:36.640 --> 0:07:37.600 Yeah. 0:07:37.360 --> 0:07:40.440 Yeah, do you think Elon's ticked? I wonder if Elon's 0:07:40.480 --> 0:07:41.120 ticked about this? 0:07:41.360 --> 0:07:43.560 I wonder, you know, the Elon zuck thing, you know, 0:07:43.600 --> 0:07:46.000 I just wish they would go to the mats and 0:07:46.080 --> 0:07:46.440 just you. 0:07:46.400 --> 0:07:48.000 Know, take it to find it out. Do you think 0:07:48.000 --> 0:07:49.720 Elon's a little little myft here? 0:07:50.040 --> 0:07:50.240 Oh? 0:07:50.280 --> 0:07:52.720 Absolutely? I mean I think you know, we saw a 0:07:52.760 --> 0:07:56.600 report by Semaphore just now that that Elon's lawyer is 0:07:56.600 --> 0:08:00.560 threatening to sue Meta metas as some the claims in 0:08:00.560 --> 0:08:04.000 that letter are are not valid. So this is just 0:08:04.040 --> 0:08:06.520 the beginning. I mean, we asked for a cage match. 0:08:07.360 --> 0:08:10.080 This is the business version of the Elon Musk Mark 0:08:10.160 --> 0:08:14.440 Zuckerberg cage match. They are certainly seeing each other as 0:08:14.560 --> 0:08:15.559 rivals in this moment. 0:08:15.720 --> 0:08:16.560 God gotta love this. 0:08:17.040 --> 0:08:18.840 Sarah Friar's so glad we could check in with her. 0:08:18.920 --> 0:08:20.560 She's our big tech team leader. 0:08:20.480 --> 0:08:21.400 Here at Bloomberg News. 0:08:21.480 --> 0:08:24.280 Her book No Filter or the Inside Story of Instagram, 0:08:24.320 --> 0:08:28.320 so she really understands the space. But in particular Facebook, 0:08:28.360 --> 0:08:32.400 Meta Instagram and how this continues to evolve. And I 0:08:32.400 --> 0:08:34.840 guess time will tell what everybody signs up for it. 0:08:34.840 --> 0:08:37.320 Why haven't you signed up for your like social queen. 0:08:37.400 --> 0:08:40.280 No, it's completely like I was in DC yesterday. I'm 0:08:40.320 --> 0:08:42.200 blaming it on that, but I think I also, like, 0:08:42.400 --> 0:08:44.680 really don't want to have to do another one. 0:08:44.760 --> 0:08:45.920 Well that's the thing, but I. 0:08:45.920 --> 0:08:47.400 Have to, so I just need to do it. 0:08:47.640 --> 0:08:48.520 We're just good, I. 0:08:48.520 --> 0:08:50.600 Know, right right, But I agree with you, it's just 0:08:50.640 --> 0:08:51.719 like another thing to keep up. 0:08:52.440 --> 0:08:56.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:56.040 --> 0:08:59.360 live weekday afternoons from three to six Eastern Listen on 0:08:59.440 --> 0:09:03.480 Bloomberg Dot, the iHeartRadio app, and the Bloomberg Business App, 0:09:03.760 --> 0:09:06.080 or watch us live on YouTube. 0:09:07.800 --> 0:09:15.719 May not then like the main not then like the thing? 0:09:18.480 --> 0:09:21.240 All right, everybody. Carol Master along with Madison Mills live. 0:09:21.200 --> 0:09:24.200 Here in our Boomberg Interactive Broker Studio on YouTube. 0:09:23.880 --> 0:09:25.320 And of course Bloomberger Originals. 0:09:25.559 --> 0:09:25.719 Well. 0:09:25.760 --> 0:09:29.080 The Private Real Estate Strategy via Liquid Reads etf at 0:09:29.160 --> 0:09:32.199 launched last month a little change, I believe, since it's. 0:09:32.000 --> 0:09:33.280 Debut on June fourteenth. 0:09:33.280 --> 0:09:35.719 When I before the market clothes, I was looking at 0:09:35.720 --> 0:09:37.720 it versus about a one point eight percent return in 0:09:37.720 --> 0:09:40.320 the Dow Jones Equity red Total Return Index. Not necessary 0:09:40.360 --> 0:09:42.280 apples to apples, but just to give you a little 0:09:42.280 --> 0:09:45.320 bit of a measure. The actively managed GTF investment apartments, 0:09:45.320 --> 0:09:49.040 single family rentals, manufactured housing, and senior housing reads. So 0:09:49.160 --> 0:09:51.720 with more on the fund and the strategy, we were 0:09:51.760 --> 0:09:54.440 delighted to have with us David Auerback, he's managing director 0:09:54.480 --> 0:09:59.600 at Armada ETF Advisors. Here in our Bloomberg Interactive Broker studio. 0:09:59.720 --> 0:10:00.559 Forget me, forgive me. 0:10:00.559 --> 0:10:02.719 I'm rushing to get to you. Welcome, Welcome, Thank you 0:10:02.800 --> 0:10:03.160 so much. 0:10:03.160 --> 0:10:04.280 Time to vibe into reads. 0:10:04.320 --> 0:10:08.200 Now, let's vibe into reads. I love real estate and 0:10:08.240 --> 0:10:10.120 it was interesting at Milkin this year. I did a 0:10:10.160 --> 0:10:12.600 panel that was just about basically focusing on office real 0:10:12.679 --> 0:10:14.839 estate and trying to get an idea, and we heard 0:10:14.880 --> 0:10:16.520 a lot about if you're at a top tier property, 0:10:16.559 --> 0:10:18.800 you're probably okay, but lower tier it might be having 0:10:18.840 --> 0:10:22.640 some problems. Talk to us, though, David, about your strategy. 0:10:22.840 --> 0:10:25.200 Sure, so private real estate and the private real estate 0:10:25.320 --> 0:10:28.160 strategy b I like with RETTF is more than residential. Right, 0:10:28.240 --> 0:10:30.640 We're taking the portfolios of the largest private real estate 0:10:30.679 --> 0:10:34.719 sponsors Blackstone, star Wood, and we can replicate those portfolios 0:10:34.800 --> 0:10:37.480 using publicly traded reads down to the percentage in terms 0:10:37.520 --> 0:10:40.439 of sector type and geographic location. So if you look 0:10:40.440 --> 0:10:43.719 at the weighted average of those portfolios, it's more than 0:10:43.800 --> 0:10:47.800 half over fifty percent in residential in those sectors. Twenty 0:10:47.800 --> 0:10:50.079 five percent or so it's an industrial, and then you've 0:10:50.120 --> 0:10:54.520 got several percent that are in sectors such as data centers, lodging, 0:10:54.800 --> 0:10:58.120 office and lab space, strip centers. It kind of sprands 0:10:58.160 --> 0:11:01.079 across all the other real estate sectors. Remember, these guys 0:11:01.080 --> 0:11:04.960 have assembled very smart management team rights building great portfolio. 0:11:05.080 --> 0:11:06.480 So you're like, they did the work, let me just 0:11:06.480 --> 0:11:07.160 mimic well. 0:11:07.120 --> 0:11:08.400 Using publicly traded reads. 0:11:08.440 --> 0:11:10.760 So the reason is really there's three issues that are 0:11:10.760 --> 0:11:14.200 at stake here, cost, liquidity, and the valuation cost. 0:11:14.640 --> 0:11:15.800 The average private. 0:11:15.520 --> 0:11:18.160 Real estate fund. When you add in the layered investment fees, 0:11:18.200 --> 0:11:21.600 including the management fee, the selling and servicing fee, the 0:11:21.640 --> 0:11:26.040 annual performance the performance fee over a certain hurdle return, 0:11:26.320 --> 0:11:27.719 those can have to be about three and a half 0:11:27.760 --> 0:11:30.560 percent a year for an average investor. Those fees add 0:11:30.640 --> 0:11:34.760 up liquidity. We've seen the headlines about the private responsors 0:11:35.000 --> 0:11:38.160 where investors can't get their money out. They've gated redemptions 0:11:38.640 --> 0:11:40.240 versus an ETF go ahead. 0:11:40.400 --> 0:11:43.120 So when you're active, you're actively managed, So you're picking 0:11:43.120 --> 0:11:45.480 what you want to do, but you're not going above 0:11:45.520 --> 0:11:46.000 and beyond. 0:11:46.040 --> 0:11:47.280 You're trusting what they are. 0:11:47.600 --> 0:11:50.320 Well, they disclosed their portfolios and a quarterly basis, so 0:11:50.360 --> 0:11:53.240 we can use their portfolios. But one example, there are 0:11:53.280 --> 0:11:56.080 no more student housing reads in the public market. So 0:11:56.240 --> 0:11:59.960 because of that, we can allocate that percentage towards another 0:12:00.040 --> 0:12:02.760 publicly traded residential rate, or we could use our know 0:12:02.800 --> 0:12:05.880 how and our expertise to potentially allocate it towards let's 0:12:05.880 --> 0:12:08.440 say a company like VICH Properties in Las Vegas that 0:12:08.480 --> 0:12:09.840 owns the Las Vegas Strip. 0:12:10.080 --> 0:12:11.600 That's another way to diversify. 0:12:11.840 --> 0:12:13.720 So what are the clients looking for and what are 0:12:13.720 --> 0:12:14.400 they asking you? 0:12:15.200 --> 0:12:16.080 Well, that's a great question. 0:12:16.120 --> 0:12:18.880 Clients are looking for yield, I mean, especially in this market, 0:12:19.000 --> 0:12:21.600 in this volatile you know, real estate tried and true, 0:12:21.679 --> 0:12:25.240 the long term performance of real estate, where they're looking 0:12:25.240 --> 0:12:28.640 for a good opportunity. We feel that PRVT could either 0:12:28.679 --> 0:12:31.680 be a good compliment to that private real estate allocation. 0:12:32.120 --> 0:12:33.880 But more importantly, it goes back to the third point, 0:12:33.880 --> 0:12:37.720 which is valuation. The valuation gap between the listed rates 0:12:37.920 --> 0:12:40.720 and the private real estate funds has never been wider, 0:12:41.120 --> 0:12:44.079 and there's recent reports out of NAYREATE, the National Association 0:12:44.160 --> 0:12:47.600 of Real Estate Investment Trusts, that shows that that divergence 0:12:48.040 --> 0:12:51.640 does come back, and the larger the divergence, basically, the 0:12:51.679 --> 0:12:54.760 more significance of the performance of the listed reads coming 0:12:54.880 --> 0:12:58.160 out of that divergence. So we feel right now, because 0:12:58.160 --> 0:13:01.559 of this wide delta, it's the perfect time for investors 0:13:01.600 --> 0:13:03.439 to pivot towards those listed. 0:13:03.160 --> 0:13:04.400 Reads because there's opportunity. 0:13:04.400 --> 0:13:06.480 Because there's opportunities, so prop it on that gap. 0:13:06.600 --> 0:13:09.560 But it's for advisors, it's for investors, high net worth investors, 0:13:09.600 --> 0:13:12.240 institutional guys. It's giving everybody a chance to play into 0:13:12.280 --> 0:13:16.600 the listed reed market. David net Worth specifically, no, no, 0:13:16.640 --> 0:13:19.439 not necessarily high net worth. Again, the average investor who 0:13:19.440 --> 0:13:22.240 may be shut out of the private reads could benefit 0:13:22.280 --> 0:13:24.920 from these smart management teams and use a publicly traded 0:13:25.000 --> 0:13:28.160 red proxy that represents those portfolios. 0:13:28.240 --> 0:13:28.760 Two things. 0:13:29.400 --> 0:13:33.640 So you said twenty five percent industrial fifty residences, and 0:13:33.640 --> 0:13:36.040 then twenty five percent was like a mix of commercial. 0:13:35.679 --> 0:13:37.640 It would be several other sectors that's correct. 0:13:37.720 --> 0:13:39.480 Can you play around with those or is that the 0:13:39.720 --> 0:13:40.439 is that the percentage? 0:13:40.480 --> 0:13:42.680 We can play around this, but again we're using the 0:13:42.720 --> 0:13:45.200 private real estate sponsors kind of as the bogie. 0:13:45.240 --> 0:13:46.360 So as they update their. 0:13:46.280 --> 0:13:49.240 Quarterly holdings, like as a good example, one of the 0:13:49.240 --> 0:13:52.160 guys is selling a big portfolio, like two thirds of 0:13:52.160 --> 0:13:55.200 their portfolio of single family rentals, one of the publicly 0:13:55.200 --> 0:13:57.200 traded reads is rumored to be buying it. You guys 0:13:57.200 --> 0:13:59.559 published a story on it, and so as a result, 0:13:59.800 --> 0:14:04.280 as that private read sponsor allocation reduces in single family 0:14:04.320 --> 0:14:07.920 rental overall, our portfolio may change a little. 0:14:07.679 --> 0:14:09.160 Bit of you're going to mimic it, because we're going 0:14:09.240 --> 0:14:09.920 to try to mimic it. 0:14:09.960 --> 0:14:11.040 How much money is coming in. 0:14:11.520 --> 0:14:14.440 We just launched a few weeks ago, so we're you know, hovering, 0:14:14.800 --> 0:14:17.160 you know, a few hundred thousand dollars. We think that 0:14:17.240 --> 0:14:21.040 again because of what's these private responsors have over eighty plus. 0:14:20.760 --> 0:14:23.240 Billion dollars of assets into them. If you add including the. 0:14:23.240 --> 0:14:26.120 Leverage and that they properties they own, you're talking one 0:14:26.200 --> 0:14:29.160 hundred and fifty plus million dollars of real estate that 0:14:29.200 --> 0:14:31.800 these guys are sitting on. There's a huge opportunity for 0:14:31.840 --> 0:14:35.080 the average investor to benefit from those private real estate funds. 0:14:35.320 --> 0:14:37.360 Talk to me about office reads. Have we seen a 0:14:37.400 --> 0:14:38.080 bottom yet? 0:14:39.000 --> 0:14:41.600 Well, you know, it's a good good example is kind 0:14:41.600 --> 0:14:43.840 of what we saw last week with SA Green announcing 0:14:43.880 --> 0:14:45.280 that minority station. 0:14:46.880 --> 0:14:48.960 Two billion dollar price to their balance sheet. 0:14:48.960 --> 0:14:50.400 And just for the industry. 0:14:49.960 --> 0:14:52.720 Overall here and you know again and not to not 0:14:52.840 --> 0:14:53.720 to forty five Park. 0:14:53.800 --> 0:14:56.920 When you think of trophy office buildings in Manhattan, personally, 0:14:56.920 --> 0:14:58.960 two forty five Park is not the first property you 0:14:58.960 --> 0:15:02.160 think of. You think of one Vandor built, the GM building, 0:15:02.320 --> 0:15:05.240 the Empire State Building, right, And so I've been saying, look, 0:15:05.240 --> 0:15:08.040 if they're vowing two forty five at Park, it two 0:15:08.080 --> 0:15:09.880 doing and I'm sure there's numbers that are going to 0:15:09.920 --> 0:15:12.560 that number. How much does the Empire State Building work? 0:15:12.640 --> 0:15:12.760 Right? 0:15:12.840 --> 0:15:13.600 It was a good sign. 0:15:13.760 --> 0:15:14.640 And the other thing. 0:15:14.520 --> 0:15:17.400 Is these guys have deep sponsors. Remember you have Government 0:15:17.440 --> 0:15:20.600 of Singapore, candid Pension, more Trust Asian investors. These guys 0:15:20.640 --> 0:15:23.600 have a long term vision of the value of these properties, 0:15:23.600 --> 0:15:25.560 and so you know it's an odd lot for them. 0:15:25.680 --> 0:15:26.920 David, I want to ask you about the time and 0:15:27.040 --> 0:15:28.560 Maddie and I have spent so much time today you's 0:15:28.560 --> 0:15:31.400 certainly talking about the move up in rates again and 0:15:31.440 --> 0:15:33.760 the concerns here, and the FED expected to probably raise 0:15:33.800 --> 0:15:36.200 rates again at the next meeting and then probably hover 0:15:36.360 --> 0:15:36.920 for a while. 0:15:37.400 --> 0:15:38.280 So how does that. 0:15:38.240 --> 0:15:40.360 Necessarily like I think real estate, and I think about 0:15:40.400 --> 0:15:45.320 the costs of servicing for these properties, and you know, 0:15:45.560 --> 0:15:47.800 depending on how much leverage is certainly into it too, 0:15:47.840 --> 0:15:49.520 So is that problematic potentially? 0:15:49.680 --> 0:15:51.040 You know, I want a caution that a read is 0:15:51.080 --> 0:15:52.400 not a read is not a read. There are so 0:15:52.480 --> 0:15:55.440 many different sectors that are out there that using a 0:15:55.480 --> 0:15:58.400 cell phone have a conversation. What does the FED raising 0:15:58.480 --> 0:16:01.520 interest rates next month have to do with a cell 0:16:01.640 --> 0:16:04.560 tower rate and having a conversation? Or if you place 0:16:04.600 --> 0:16:06.680 an order on your cell phone from Amazon and that 0:16:06.760 --> 0:16:09.440 utilizes three different reate sectors in case you didn't know, 0:16:09.520 --> 0:16:12.120 industrial rates, data center reds, and a tower read Right, 0:16:12.360 --> 0:16:15.720 how does that transaction impacted by the FED raising interest rates? 0:16:15.720 --> 0:16:17.520 And the answer is prob So you have a lot 0:16:17.520 --> 0:16:20.480 of residential is residential, but again that doesn't get impact. 0:16:20.520 --> 0:16:23.840 But that benefits the single family rental players, the rental landlords. 0:16:23.880 --> 0:16:26.040 In fact, we're sitting in one of the hottest apartment 0:16:26.080 --> 0:16:28.480 markets in the country right now in New York City. 0:16:28.800 --> 0:16:30.800 So as a result, because the demand. 0:16:30.440 --> 0:16:31.320 Is through the roof. 0:16:31.840 --> 0:16:34.560 If you're in the market for a seven percent mortgage, 0:16:34.560 --> 0:16:36.800 that's the new normal that's out there right now. But 0:16:36.800 --> 0:16:38.920 at the end of the day, there's simply not enough 0:16:39.000 --> 0:16:41.720 housing inventory for want be buyers that are out there. 0:16:41.800 --> 0:16:45.000 You're not concerned, I would say, we're minimally concerned. 0:16:45.040 --> 0:16:47.240 It's again, we have to focus on the long term picture. 0:16:47.360 --> 0:16:50.880 Recession. Would that be more problematic? Potentially? 0:16:51.000 --> 0:16:52.720 Again depends on the sector and the story. 0:16:52.880 --> 0:16:56.560 Okay, to what extent do you envision your client changing 0:16:56.880 --> 0:17:01.160 as it gets harder and harder for work young folks 0:17:01.240 --> 0:17:03.040 like myself to ever buy a home. 0:17:04.359 --> 0:17:07.480 I think again, from the rental perspective, the single family 0:17:07.560 --> 0:17:10.520 landlords that are out there that are growing their portfolios nationwide, 0:17:10.800 --> 0:17:14.400 are gearing those portfolios towards the next generation. The apartments 0:17:14.400 --> 0:17:17.200 that are being developed right now, it's not gear really 0:17:17.240 --> 0:17:19.720 for you know who's there now. It's for the coming 0:17:19.760 --> 0:17:22.000 in college crowd that's going to be out there. It's 0:17:22.040 --> 0:17:24.280 that next wave of demand. If you think about it, 0:17:24.280 --> 0:17:26.560 if you take a you know, a Class B property 0:17:26.640 --> 0:17:28.359 put on a flatbed in New York and drop it 0:17:28.400 --> 0:17:30.720 off in Farga and North Dakota. That's a Class A 0:17:30.840 --> 0:17:34.240 property up there. So you're bringing that desirable product to 0:17:34.320 --> 0:17:36.879 where that puck is going. And so as a result, 0:17:37.119 --> 0:17:39.680 until we see a massive reset in New York prices, 0:17:39.720 --> 0:17:41.800 and sorry to be the bear bad news, I don't 0:17:41.800 --> 0:17:44.040 think we're going to be seeing something affordable. You know, 0:17:44.240 --> 0:17:46.080 sadly there are people in New York that rent their 0:17:46.200 --> 0:17:48.480 entire lives that don't get to achieve the American dream. 0:17:48.600 --> 0:17:50.800 But you can rent from a single family landlord have 0:17:50.840 --> 0:17:54.040 that four four bedroom, three bathroom house and even though 0:17:54.080 --> 0:17:55.679 you're paying the rent to the landlord instead. 0:17:55.720 --> 0:17:57.040 If you had to say the hottest play in real 0:17:57.119 --> 0:17:58.320 estate right now, what would you say? 0:17:59.320 --> 0:18:01.639 Probably in Dush because we had this price point with 0:18:01.640 --> 0:18:03.560 pro Logist in Blackstone earlier this week. 0:18:03.600 --> 0:18:06.200 So data or warehousing or a little bit, I think. 0:18:06.040 --> 0:18:06.680 A little bit of both. 0:18:06.680 --> 0:18:09.000 I still think the growth of towers and data centers, 0:18:09.080 --> 0:18:10.080 especially with how much. 0:18:10.000 --> 0:18:11.640 We're doing more and more online. 0:18:11.720 --> 0:18:13.800 I mean, I use, I watched Bloomberg twenty four seven, 0:18:13.880 --> 0:18:16.119 so I'm using my internet stream that you know, if 0:18:16.119 --> 0:18:18.639 I place some all flows up through the south to 0:18:18.680 --> 0:18:19.359 the towers, all. 0:18:19.280 --> 0:18:19.840 Right, we got to run. 0:18:19.920 --> 0:18:20.720 David, thank you so much. 0:18:20.800 --> 0:18:21.080 Thank you. 0:18:21.119 --> 0:18:21.840 Let'sen know how it goes. 0:18:21.880 --> 0:18:25.200 David our Back, managing director at Armada ETF Advisors. 0:18:25.200 --> 0:18:26.000 Here in studio. 0:18:26.160 --> 0:18:30.360 Right here on Bloomberg, you're listening to the Bloomberg Business 0:18:30.400 --> 0:18:34.000 Week podcast. Catch us live weekday afternoons from three to 0:18:34.080 --> 0:18:38.440 six Easter on Bloomberg Radio, the Bloomberg Business App and YouTube. 0:18:38.560 --> 0:18:41.399