1 00:00:02,720 --> 00:00:10,560 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,480 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:18,479 Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 4 00:00:18,600 --> 00:00:21,840 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:21,920 --> 00:00:23,040 Speaker 1: us live on YouTube. 6 00:00:24,000 --> 00:00:26,360 Speaker 2: Balax Deal Paul Sweeney live here in our Bloomberg Interactive 7 00:00:26,400 --> 00:00:30,480 Speaker 2: Broker's studio. We're streaming live on YouTube as well. To 8 00:00:30,560 --> 00:00:33,040 Speaker 2: check us out there. So it took longer to expect it, 9 00:00:33,080 --> 00:00:36,879 Speaker 2: but Germany now has a chancellor. Ros Mathison joins us 10 00:00:36,880 --> 00:00:41,920 Speaker 2: Bloomberg News Director for Europe, the Middle East and Africa. Ross, 11 00:00:42,400 --> 00:00:44,239 Speaker 2: like most Americans, I woke up to this news and 12 00:00:44,240 --> 00:00:45,240 Speaker 2: then I was like, is that. 13 00:00:45,159 --> 00:00:47,160 Speaker 3: A big deal? Apparently it's a big. 14 00:00:47,040 --> 00:00:50,080 Speaker 2: Deal not getting kind of elected on that first ballot. 15 00:00:50,080 --> 00:00:51,640 Speaker 2: Can you give us the context of there? 16 00:00:53,479 --> 00:00:55,080 Speaker 4: Well, that's right, I mean it was supposed to be 17 00:00:55,160 --> 00:00:58,200 Speaker 4: a pro former moment. It was just to set peace 18 00:00:58,320 --> 00:01:02,200 Speaker 4: vote in Parliament for him to be formally confirmed by 19 00:01:02,320 --> 00:01:06,000 Speaker 4: lawmakers as chancellor. Then he would go off Stark cabinet 20 00:01:06,240 --> 00:01:09,560 Speaker 4: and he was due to go to Paris tomorrow to 21 00:01:09,680 --> 00:01:12,319 Speaker 4: meet with the French leader. So it was all supposed 22 00:01:12,319 --> 00:01:14,360 Speaker 4: to roll off from there, and of course he'd already 23 00:01:14,680 --> 00:01:18,000 Speaker 4: done the work to get these big changes through Parliament 24 00:01:18,040 --> 00:01:21,039 Speaker 4: in terms of removing the debt break on Germany, big 25 00:01:21,080 --> 00:01:23,760 Speaker 4: package around infrastructure and defense. So it was quite shocking 26 00:01:24,120 --> 00:01:26,640 Speaker 4: to see this result given you know that he had 27 00:01:26,680 --> 00:01:30,679 Speaker 4: the numbers in theory to be voted through as chancellor 28 00:01:30,720 --> 00:01:34,360 Speaker 4: by Parliament. The question is who voted against him and 29 00:01:34,440 --> 00:01:37,000 Speaker 4: if so, why, And so we had this second vote 30 00:01:37,040 --> 00:01:39,000 Speaker 4: just a short time ago. He got over the line 31 00:01:39,040 --> 00:01:41,440 Speaker 4: he needed three hundred and sixteen, He got a through 32 00:01:41,560 --> 00:01:44,600 Speaker 4: three hundred and twenty five. So they got there and 33 00:01:44,640 --> 00:01:47,080 Speaker 4: now he will of course go off and be chancellor. 34 00:01:47,120 --> 00:01:50,520 Speaker 4: But the fact this happened is just a really negative 35 00:01:50,560 --> 00:01:53,400 Speaker 4: sign for the start of his administration and for the 36 00:01:53,440 --> 00:01:56,960 Speaker 4: difficulties that will lie ahead potentially getting stuff done with parliament. 37 00:01:57,320 --> 00:01:58,280 Speaker 3: So would we. 38 00:01:58,720 --> 00:02:01,280 Speaker 5: So he already didn't have a mandate, So then now 39 00:02:01,360 --> 00:02:03,440 Speaker 5: is it like an extra non mandate. 40 00:02:04,720 --> 00:02:07,400 Speaker 4: Well, I mean he does. He does have a coalition 41 00:02:08,000 --> 00:02:11,360 Speaker 4: within his with his block and the center left Social Democrats, 42 00:02:11,360 --> 00:02:14,560 Speaker 4: so he's got a functioning coalition in Parliament. But it 43 00:02:14,680 --> 00:02:17,959 Speaker 4: just shows again that there are lots of strands against him, 44 00:02:18,040 --> 00:02:22,040 Speaker 4: even within that coalition, and that some lawmakers may object 45 00:02:22,080 --> 00:02:25,680 Speaker 4: to certain policies. It could be quite difficult to negotiate 46 00:02:25,800 --> 00:02:30,080 Speaker 4: changes to policy, including with the Social Democrats between which 47 00:02:30,520 --> 00:02:33,040 Speaker 4: they're in coalition. And what was the intention of these 48 00:02:33,120 --> 00:02:36,240 Speaker 4: lawmakers in voting against him in this minute was to 49 00:02:36,280 --> 00:02:38,200 Speaker 4: send a signal that you know, they are going to 50 00:02:38,240 --> 00:02:41,720 Speaker 4: be hard on some policy platforms with him, that they're 51 00:02:41,720 --> 00:02:44,760 Speaker 4: not particularly happy that his chance. It's really hard to 52 00:02:44,800 --> 00:02:48,080 Speaker 4: know what happened he today therefore the signals from it, 53 00:02:48,120 --> 00:02:51,480 Speaker 4: but it's not a positive start of confidence really in 54 00:02:51,520 --> 00:02:52,279 Speaker 4: his administration. 55 00:02:52,400 --> 00:02:55,560 Speaker 2: You'd have to say, ros what is the job one 56 00:02:55,639 --> 00:02:57,920 Speaker 2: here for mister Marrison and his government? 57 00:02:57,960 --> 00:02:58,200 Speaker 3: Now? 58 00:03:00,000 --> 00:03:03,920 Speaker 4: Obviously he's worked already to get that depth break lifted, 59 00:03:03,960 --> 00:03:06,240 Speaker 4: which is a really important step for Germany to be 60 00:03:06,320 --> 00:03:10,640 Speaker 4: able to unshackle itself fiscally and to get these infrastructure 61 00:03:10,680 --> 00:03:14,040 Speaker 4: and infrastructure and defense packages moving. But also they've got 62 00:03:14,040 --> 00:03:16,400 Speaker 4: to now work out how to spend the money. You know, 63 00:03:16,440 --> 00:03:19,000 Speaker 4: there's a lot to spend it all with infrastructure, but 64 00:03:19,040 --> 00:03:22,359 Speaker 4: there's a lot of red tape also involved in bureaucracy, 65 00:03:22,400 --> 00:03:24,920 Speaker 4: and so how do you get this money flowing and 66 00:03:24,960 --> 00:03:27,960 Speaker 4: going where it needs to to? Really structurally kickstart the 67 00:03:28,000 --> 00:03:31,040 Speaker 4: German economy. Obviously a lot of external headwinds that you know, 68 00:03:31,240 --> 00:03:35,920 Speaker 4: this is Europe's significant economy to grapple with in terms 69 00:03:35,920 --> 00:03:39,720 Speaker 4: of the Trump administration, tensions on trade, you know what's 70 00:03:39,760 --> 00:03:43,000 Speaker 4: happening in the next steps in Russia's war, in Ukraine 71 00:03:43,280 --> 00:03:45,200 Speaker 4: and so on. In Germany needs to be a big 72 00:03:45,280 --> 00:03:48,160 Speaker 4: voice in all of that. So it's sort of internal 73 00:03:48,280 --> 00:03:52,280 Speaker 4: questions around the economy. But there's also the far right AfD, 74 00:03:52,560 --> 00:03:55,720 Speaker 4: which is the biggest opposition group in Parliament, could be 75 00:03:55,760 --> 00:03:58,280 Speaker 4: pushing him along on things like migration. So he's got 76 00:03:58,320 --> 00:04:00,600 Speaker 4: a bunch of domestic challenges, and then he's got the 77 00:04:00,640 --> 00:04:03,960 Speaker 4: external environment, which is like trade and Ukraine and much 78 00:04:04,000 --> 00:04:04,480 Speaker 4: much more. 79 00:04:05,120 --> 00:04:06,280 Speaker 6: All right, ros, we appreciate it. 80 00:04:06,320 --> 00:04:08,720 Speaker 5: Thank you so very much. Roz Matheson, Bloomberg News Director 81 00:04:08,760 --> 00:04:11,720 Speaker 5: for Europe, Middle East and Africa. Frederick Mertz getting the 82 00:04:11,800 --> 00:04:14,160 Speaker 5: backing of Parliament in a second vote for Germany's a 83 00:04:14,280 --> 00:04:16,720 Speaker 5: next chancellor. This is the latest ballot of lawmakers after 84 00:04:16,760 --> 00:04:18,719 Speaker 5: a failure in the first vote that came to a 85 00:04:18,720 --> 00:04:23,360 Speaker 5: shock as everyone market participants and politicians alike. 86 00:04:23,480 --> 00:04:28,760 Speaker 1: You're listening to the Bloomberg Intelligence podcast Catch US Live 87 00:04:28,839 --> 00:04:31,960 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 88 00:04:31,960 --> 00:04:35,279 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 89 00:04:35,320 --> 00:04:38,440 Speaker 1: you get your podcasts, or watch US live on YouTube. 90 00:04:39,000 --> 00:04:41,520 Speaker 5: All right, let's keep going with the door dash theme here, 91 00:04:41,560 --> 00:04:44,120 Speaker 5: agreeing to by delivery in a less than of four 92 00:04:44,160 --> 00:04:47,360 Speaker 5: billion dollar deal three point nine billion dollars. Us Mandy 93 00:04:47,360 --> 00:04:50,599 Speaker 5: p Ssening, Bloomberg Intelligence senior tech industry analyst, joins us, Now, 94 00:04:50,720 --> 00:04:51,760 Speaker 5: what do you make of the price tag? 95 00:04:53,000 --> 00:04:56,480 Speaker 7: Well, I mean it's not one of the expensive acquisitions 96 00:04:56,480 --> 00:05:00,520 Speaker 7: that we have seen with these online delivery companies. Multiple 97 00:05:00,680 --> 00:05:04,159 Speaker 7: is quite low. It's about you know, one point two 98 00:05:04,240 --> 00:05:08,240 Speaker 7: times ev do sales. So look, when it comes to 99 00:05:08,560 --> 00:05:12,320 Speaker 7: delivery companies, we know they have had their challenges with 100 00:05:12,480 --> 00:05:16,920 Speaker 7: profitability and that's why you know, Delivery, even though it 101 00:05:17,160 --> 00:05:20,279 Speaker 7: ipoed a few years back at a much higher valuation, 102 00:05:21,640 --> 00:05:25,320 Speaker 7: you know, the selling price is a lot lower because 103 00:05:25,400 --> 00:05:29,560 Speaker 7: of all the execution challenges they had. And in this case, 104 00:05:29,640 --> 00:05:34,240 Speaker 7: I think DoorDash has a proven track record when it 105 00:05:34,279 --> 00:05:39,040 Speaker 7: comes to showing better profitability than they appear, So you know, 106 00:05:39,120 --> 00:05:42,159 Speaker 7: it's it's an easy way for them to expand in 107 00:05:42,240 --> 00:05:45,760 Speaker 7: the UK market given most of their businesses here in 108 00:05:45,760 --> 00:05:49,039 Speaker 7: the US, and so it does make sense. I mean 109 00:05:49,080 --> 00:05:52,920 Speaker 7: the key question is can they implement their playbook and 110 00:05:53,080 --> 00:05:58,159 Speaker 7: make the delivery unit profitable in one to two years? 111 00:05:58,680 --> 00:06:01,320 Speaker 2: And Alex, I know you're to know this information. JP 112 00:06:01,440 --> 00:06:04,640 Speaker 2: Morgan advised DoorDash and Allen and Company and Golden Sacks 113 00:06:04,680 --> 00:06:07,799 Speaker 2: advise a delivery U. So again, bankers getting paid. 114 00:06:08,080 --> 00:06:09,160 Speaker 8: So that's what we like to see. 115 00:06:09,200 --> 00:06:11,080 Speaker 3: I believe in that exactly. Talk to us. 116 00:06:11,120 --> 00:06:14,640 Speaker 2: I'man deep about so, I'm a vowed I do not 117 00:06:14,760 --> 00:06:17,359 Speaker 2: support this home delivery of food thing, and my kids 118 00:06:17,400 --> 00:06:18,760 Speaker 2: know that, and I won't pay for it, and they 119 00:06:19,120 --> 00:06:20,920 Speaker 2: get put in a penalty box if I ever see 120 00:06:20,960 --> 00:06:23,480 Speaker 2: a charge on a credit card. Talk to us about 121 00:06:23,480 --> 00:06:26,040 Speaker 2: the economics of delivering food here in the US versus 122 00:06:26,960 --> 00:06:29,760 Speaker 2: delivery delivery use wherever they are in the UK. 123 00:06:31,400 --> 00:06:35,360 Speaker 7: Yeah, I mean, look this, the three side marketplace businesses 124 00:06:35,720 --> 00:06:40,120 Speaker 7: are not the easiest to run in terms of unit economics. 125 00:06:40,240 --> 00:06:45,839 Speaker 7: And that's why you know, DoorDash has emerged as the 126 00:06:45,880 --> 00:06:51,159 Speaker 7: category leader because not only have they executed better in 127 00:06:51,240 --> 00:06:55,640 Speaker 7: terms of batching efficiencies and really making sure they optimize 128 00:06:55,720 --> 00:06:58,200 Speaker 7: the time of the person who is delivering the order, 129 00:06:58,560 --> 00:07:01,560 Speaker 7: but also they've been able to there on ads. They've 130 00:07:01,600 --> 00:07:06,080 Speaker 7: been able to layer on some technology solutions where they 131 00:07:06,120 --> 00:07:09,520 Speaker 7: would do the app or the website of the merchant 132 00:07:09,760 --> 00:07:12,240 Speaker 7: that they are delivering food from, so they will charge 133 00:07:12,240 --> 00:07:15,320 Speaker 7: them a fee for that. And all these small things 134 00:07:15,800 --> 00:07:22,960 Speaker 7: have added to their profitability in contrast to even an 135 00:07:23,120 --> 00:07:27,360 Speaker 7: Uber eats, which is not as profitable as a door Dashes. 136 00:07:27,480 --> 00:07:30,320 Speaker 7: So that just goes to show that scale is important 137 00:07:30,360 --> 00:07:33,640 Speaker 7: in this business, but also operational execution, and that's what 138 00:07:33,720 --> 00:07:36,800 Speaker 7: I think the door Dash team has delivered since their IPO. 139 00:07:38,480 --> 00:07:41,320 Speaker 5: I guess the question for me is how much runway 140 00:07:41,840 --> 00:07:45,280 Speaker 5: is do these companies have, Like how can they grow 141 00:07:45,320 --> 00:07:48,320 Speaker 5: their total addressable market when in theory like you're not 142 00:07:48,360 --> 00:07:50,360 Speaker 5: going to use this in the middle of a suburb. 143 00:07:50,400 --> 00:07:51,840 Speaker 5: Maybe do in the suburb, but not in like a 144 00:07:51,920 --> 00:07:55,600 Speaker 5: rural area. 145 00:07:55,800 --> 00:07:58,240 Speaker 7: I mean, just look at how much they have grown 146 00:07:58,520 --> 00:08:01,520 Speaker 7: since the pandemic, which is when they got the big bump, 147 00:08:01,560 --> 00:08:04,800 Speaker 7: and since then they've been, like DoorDash has been compounding 148 00:08:05,520 --> 00:08:09,280 Speaker 7: top line at a twenty percent keeger. And the reason 149 00:08:09,320 --> 00:08:11,760 Speaker 7: they've been able to do that is they're pretty much 150 00:08:11,840 --> 00:08:16,040 Speaker 7: doing all last mile delivery. I think Amazon Prime they 151 00:08:16,040 --> 00:08:19,760 Speaker 7: are doing that on the delivery side now with grocery delivery, 152 00:08:19,920 --> 00:08:23,720 Speaker 7: convenience delivery, and that is what gives you the batching 153 00:08:23,840 --> 00:08:27,320 Speaker 7: efficiency in terms of saying, hey, not only are you 154 00:08:27,560 --> 00:08:30,480 Speaker 7: helping me deliver food from the restaurant, but also pick 155 00:08:30,560 --> 00:08:33,560 Speaker 7: up this thing from the convenience store and also this 156 00:08:33,720 --> 00:08:37,600 Speaker 7: grocery So all these thinks I when you look at 157 00:08:37,600 --> 00:08:40,120 Speaker 7: the scale in terms of number of orders and GMV, 158 00:08:40,280 --> 00:08:43,240 Speaker 7: I mean DoorDash may do almost one hundred billion dollars 159 00:08:43,280 --> 00:08:48,760 Speaker 7: in GMV this year. So it just goes to show that, 160 00:08:49,040 --> 00:08:52,599 Speaker 7: you know, there is a market in terms of online 161 00:08:52,800 --> 00:08:55,360 Speaker 7: conversion of a lot of the things that used to 162 00:08:55,440 --> 00:08:59,079 Speaker 7: be done in store. And once you digitize the data, 163 00:08:59,160 --> 00:09:01,800 Speaker 7: you are able to layer on ads and people will 164 00:09:01,800 --> 00:09:05,160 Speaker 7: pay for convenience provided the costs are not that high, 165 00:09:05,400 --> 00:09:07,280 Speaker 7: which is why the delivery side is still a low 166 00:09:07,320 --> 00:09:11,559 Speaker 7: margin business. But it's all these ancillary services that makes 167 00:09:11,600 --> 00:09:15,520 Speaker 7: the company profitable and it comes with scale, so which 168 00:09:15,600 --> 00:09:17,480 Speaker 7: is what orda Asha has been able to achieve. 169 00:09:17,640 --> 00:09:20,720 Speaker 2: Yep, absolutely all right, Mandeve, thank you so much. Sweeney 170 00:09:20,800 --> 00:09:22,720 Speaker 2: Offspring are still not allowed to use any of these 171 00:09:22,760 --> 00:09:23,559 Speaker 2: food delivery. 172 00:09:23,280 --> 00:09:25,480 Speaker 3: Service so they do they still do once. 173 00:09:25,320 --> 00:09:27,480 Speaker 2: On one will sneak by and then I shut off 174 00:09:27,520 --> 00:09:28,920 Speaker 2: the credit cards for I've seen it happen. 175 00:09:29,120 --> 00:09:33,280 Speaker 8: Nothing makes me more angry than seeing a delivery at 176 00:09:33,360 --> 00:09:36,479 Speaker 8: the front door. Just go mental, exactly. 177 00:09:37,480 --> 00:09:39,480 Speaker 2: It is convenience, but it's so expensive and just the 178 00:09:39,520 --> 00:09:41,200 Speaker 2: value is not there for me. All Right, Mandy, you've 179 00:09:41,200 --> 00:09:43,600 Speaker 2: saying he does that stuff for a living for Bloomberg Intelligence. 180 00:09:45,240 --> 00:09:48,920 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 181 00:09:49,000 --> 00:09:52,400 Speaker 1: weekdays at ten am Eastern on Applecarclay, and Android Auto 182 00:09:52,520 --> 00:09:55,560 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 183 00:09:55,600 --> 00:09:59,679 Speaker 1: get your podcasts, or watch us live on YouTube. 184 00:10:00,080 --> 00:10:03,680 Speaker 2: Of the topics at Alex I like to revisit on 185 00:10:03,960 --> 00:10:06,280 Speaker 2: occasion is the commercial real estate business. Talking about a 186 00:10:06,320 --> 00:10:09,080 Speaker 2: business that was really impacted by the pandemic, particularly in 187 00:10:09,120 --> 00:10:11,240 Speaker 2: some of the larger markets like New York City, so 188 00:10:11,440 --> 00:10:14,040 Speaker 2: it's wrong. We like chatting with our next guest, Best Friedman. 189 00:10:14,280 --> 00:10:17,839 Speaker 2: She's the chief executive officer at Brown Harris Stevens. She's 190 00:10:17,920 --> 00:10:19,640 Speaker 2: joining us from New York City via the Zoom thing. 191 00:10:19,880 --> 00:10:23,520 Speaker 2: Best thanks so much for joining us here here on 192 00:10:23,600 --> 00:10:26,920 Speaker 2: Lexington Avenue, fifty eighth Street. We've still got a lot 193 00:10:26,920 --> 00:10:30,360 Speaker 2: of vacant retail. Talk to us about that part of 194 00:10:30,400 --> 00:10:31,000 Speaker 2: the market here. 195 00:10:32,040 --> 00:10:34,920 Speaker 9: Yeah, I mean, I think you're seeing two different narratives. 196 00:10:35,520 --> 00:10:38,080 Speaker 9: You know, you're seeing openings, but you're also seeing a 197 00:10:38,080 --> 00:10:39,120 Speaker 9: lot of closings. 198 00:10:39,200 --> 00:10:41,679 Speaker 6: And we're just not out of the woods yet. 199 00:10:42,320 --> 00:10:44,880 Speaker 9: We started to see the early stages of what I 200 00:10:44,880 --> 00:10:48,719 Speaker 9: would describe as a moderate recovery. But there's still some 201 00:10:48,760 --> 00:10:53,200 Speaker 9: great challenges, specifically in places like New York City. In 202 00:10:53,240 --> 00:10:57,120 Speaker 9: San Francisco, I know, has similar challenges, and we need 203 00:10:57,120 --> 00:11:02,440 Speaker 9: to address issues like homelessness, crime, all of those sorts 204 00:11:02,440 --> 00:11:05,680 Speaker 9: of things need to be addressed in safety, and it's 205 00:11:05,720 --> 00:11:08,400 Speaker 9: impacting our city overall. 206 00:11:08,600 --> 00:11:11,000 Speaker 6: And so we're getting there. We've made progress. 207 00:11:11,320 --> 00:11:13,960 Speaker 9: Last year was better than twenty twenty three, for sure, 208 00:11:14,480 --> 00:11:17,680 Speaker 9: wasn't as good as twenty twenty two. And some sectors 209 00:11:17,720 --> 00:11:22,080 Speaker 9: are performing better than others. A multifamily performed really well 210 00:11:22,400 --> 00:11:24,079 Speaker 9: and it's continuing. 211 00:11:23,480 --> 00:11:24,000 Speaker 6: To do so. 212 00:11:25,160 --> 00:11:29,000 Speaker 9: And nationwide, vacancy rates are at something like seventeen percent 213 00:11:29,559 --> 00:11:31,800 Speaker 9: or in New York City at seventeen. I think nationwide 214 00:11:31,840 --> 00:11:35,600 Speaker 9: it's fourteen and so for the quarter one twenty twenty five, 215 00:11:35,679 --> 00:11:37,120 Speaker 9: So look, it's a mixed bag. 216 00:11:37,160 --> 00:11:38,680 Speaker 6: There's some good and there's bad. 217 00:11:39,200 --> 00:11:42,280 Speaker 5: What is the most misunderstood piece of the commercial real 218 00:11:42,400 --> 00:11:43,640 Speaker 5: estate market right now? 219 00:11:45,679 --> 00:11:48,920 Speaker 9: You know, I think that you know you're hearing there 220 00:11:49,000 --> 00:11:51,120 Speaker 9: was a lot of doom and gloom that people were 221 00:11:51,160 --> 00:11:55,520 Speaker 9: talking about, you know, in early on after COVID, and 222 00:11:55,600 --> 00:11:58,200 Speaker 9: I think you've seen a decent recovery and the demand 223 00:11:58,320 --> 00:12:02,120 Speaker 9: is there, and there is demand for office space, just FYI, 224 00:12:02,200 --> 00:12:03,520 Speaker 9: I think that's misunderstood. 225 00:12:03,559 --> 00:12:06,320 Speaker 6: There are people that do want to be in the offices. 226 00:12:06,360 --> 00:12:09,640 Speaker 9: People are requiring it in New York City, and I 227 00:12:09,640 --> 00:12:11,800 Speaker 9: think that's a good thing. But the demand is for 228 00:12:11,960 --> 00:12:15,160 Speaker 9: quality and I think you know, the B and C 229 00:12:15,520 --> 00:12:19,120 Speaker 9: office spaces, we're gonna have to do something with those. 230 00:12:19,440 --> 00:12:21,960 Speaker 9: But I do think people have returned to the office, 231 00:12:22,120 --> 00:12:24,920 Speaker 9: want to be here, even if it's partial and there's 232 00:12:25,040 --> 00:12:29,040 Speaker 9: hybrid working. I think that you know, that is misunderstood. 233 00:12:29,080 --> 00:12:32,640 Speaker 9: There's not this sort of work from home across the country. 234 00:12:34,240 --> 00:12:36,000 Speaker 2: Hey, best talk to those about just kind of the 235 00:12:36,520 --> 00:12:38,960 Speaker 2: lending markets here. Let's say I wanted to develop a 236 00:12:38,960 --> 00:12:40,440 Speaker 2: property or buy a building. 237 00:12:41,360 --> 00:12:42,840 Speaker 3: Is my local bank going to be there for me? 238 00:12:43,760 --> 00:12:46,880 Speaker 9: Depends, I mean, it all depends on what building, who 239 00:12:46,960 --> 00:12:49,400 Speaker 9: you are, you know, it's all of those issues. 240 00:12:49,480 --> 00:12:51,359 Speaker 6: All of those things are are important. 241 00:12:52,360 --> 00:12:55,920 Speaker 9: And you know, there are some loans becoming due at 242 00:12:55,920 --> 00:12:58,640 Speaker 9: the end of this year and next year. I think 243 00:12:58,720 --> 00:13:01,840 Speaker 9: next year, twenty two, twenty six, some loans are maturing 244 00:13:02,480 --> 00:13:04,920 Speaker 9: in the commercial realm. It's something like one point eight 245 00:13:04,960 --> 00:13:09,560 Speaker 9: trillion dollars, So that's what people are concerned about. But yes, 246 00:13:10,200 --> 00:13:12,600 Speaker 9: there is money out there and people will lend. It's 247 00:13:12,640 --> 00:13:15,600 Speaker 9: tighter than it has been. Credit has been really hard. 248 00:13:16,480 --> 00:13:18,400 Speaker 9: But at the end of the day, if you have 249 00:13:18,960 --> 00:13:21,640 Speaker 9: are somebody that has done projects and people will lent 250 00:13:21,720 --> 00:13:23,600 Speaker 9: to you and it's the right project and it makes 251 00:13:23,600 --> 00:13:24,720 Speaker 9: sense and you can prove it. 252 00:13:24,880 --> 00:13:27,440 Speaker 6: Yes, but it's not what it was, you know. 253 00:13:27,559 --> 00:13:33,160 Speaker 9: I think the economic uncertainty, the higher rates, inflation, even tariffs, 254 00:13:33,240 --> 00:13:37,360 Speaker 9: all of that stuff, you know, has people rethinking things 255 00:13:37,480 --> 00:13:39,880 Speaker 9: and being a little bit more cautious. 256 00:13:40,480 --> 00:13:42,520 Speaker 5: I think everyone was kind of waiting for the big 257 00:13:42,559 --> 00:13:45,960 Speaker 5: fallout to happen and it never really did. Does that 258 00:13:46,040 --> 00:13:48,319 Speaker 5: eventually happen or is it going to be on sort 259 00:13:48,320 --> 00:13:52,319 Speaker 5: of property to property rolling basis over the long term. 260 00:13:52,800 --> 00:13:54,600 Speaker 9: Yeah, I don't know if there's going to I mean, 261 00:13:55,080 --> 00:13:58,839 Speaker 9: predictions are impossible. We none of us know really because 262 00:13:58,840 --> 00:14:02,040 Speaker 9: every day is a different news story and what's going 263 00:14:02,080 --> 00:14:05,600 Speaker 9: on in the economy. So I don't know if there's 264 00:14:05,640 --> 00:14:09,040 Speaker 9: going to be some sort of huge fallout, if it's 265 00:14:09,080 --> 00:14:09,880 Speaker 9: going to get rougher. 266 00:14:10,000 --> 00:14:12,320 Speaker 6: It could, but I do think it's depends. 267 00:14:12,360 --> 00:14:14,520 Speaker 9: It's almost like if you look at retail, which is 268 00:14:14,559 --> 00:14:18,480 Speaker 9: a mixed bag. You see, you know, Walmart's opening up 269 00:14:18,559 --> 00:14:22,320 Speaker 9: and Trader Joe's opening up, but then you see Walgreens closing, 270 00:14:22,480 --> 00:14:25,840 Speaker 9: and so you know it's and so it just depends 271 00:14:25,840 --> 00:14:28,760 Speaker 9: on what it is. You know, there's it depends on 272 00:14:28,880 --> 00:14:33,160 Speaker 9: what is happening and what the business is and where 273 00:14:33,160 --> 00:14:34,840 Speaker 9: it is and all of those things. 274 00:14:36,160 --> 00:14:39,200 Speaker 2: Best talk to us about South Florida. 275 00:14:39,320 --> 00:14:41,200 Speaker 3: Is it still strong or is it rolled over? 276 00:14:42,480 --> 00:14:45,880 Speaker 9: You know, South Storea, Florida is is doing well. It's 277 00:14:45,920 --> 00:14:50,280 Speaker 9: it's it's decent. It's it's it's steady. There's demand. Uh, 278 00:14:50,320 --> 00:14:53,000 Speaker 9: And you know, I think there was an article today 279 00:14:53,080 --> 00:14:58,120 Speaker 9: in the Journal about Florida and the demand for real estate. 280 00:14:58,160 --> 00:15:01,240 Speaker 9: There is decent people but want to be in Florida, 281 00:15:02,200 --> 00:15:05,520 Speaker 9: and there has been this sort of migration of businesses 282 00:15:05,600 --> 00:15:08,600 Speaker 9: moving to Florida, and so I think that has remained 283 00:15:08,640 --> 00:15:11,880 Speaker 9: the same. I don't see that changing anytime soon, so 284 00:15:12,760 --> 00:15:14,760 Speaker 9: we'll have to see all right. 285 00:15:14,800 --> 00:15:16,560 Speaker 2: Best, Thank you so much for joining us. Always appreciate 286 00:15:16,600 --> 00:15:19,720 Speaker 2: getting your perspective. Best for reading. She is the chief 287 00:15:20,280 --> 00:15:23,920 Speaker 2: chief executive officer of Brown Harris Steven's giving us an 288 00:15:24,000 --> 00:15:26,440 Speaker 2: update on kind of global real estate. Again, a little 289 00:15:26,440 --> 00:15:29,480 Speaker 2: bit of uncertainty out there in just the overall economy 290 00:15:29,520 --> 00:15:31,760 Speaker 2: even finding its way into the real estate maybe not 291 00:15:31,800 --> 00:15:34,920 Speaker 2: going to hold off on a certain project, or hold 292 00:15:34,960 --> 00:15:36,480 Speaker 2: off on upgrading or something along. 293 00:15:36,560 --> 00:15:38,320 Speaker 5: I feel like this reminds me of the default cycle 294 00:15:38,360 --> 00:15:40,960 Speaker 5: we were supposed to see in twenty sixteen, Like that 295 00:15:41,080 --> 00:15:43,400 Speaker 5: huge fallout that was supposed to happen that all the 296 00:15:44,560 --> 00:15:46,120 Speaker 5: private guys were all excited about. 297 00:15:46,160 --> 00:15:47,920 Speaker 6: That huge wave didn't happen. 298 00:15:48,040 --> 00:15:50,960 Speaker 5: It didn't mean there weren't opportunities, but that wave didn't happen. 299 00:15:51,000 --> 00:15:53,280 Speaker 5: It feels like something similar is also evolving in the 300 00:15:53,320 --> 00:15:55,800 Speaker 5: commercial real estate space as well. 301 00:15:56,000 --> 00:15:58,080 Speaker 2: Yeah, and we were told by a lot of bank 302 00:15:58,120 --> 00:16:00,680 Speaker 2: anlysts that you'd see probably more in the small, mid 303 00:16:00,720 --> 00:16:04,040 Speaker 2: sized banks who maybe had some more local commercial real 304 00:16:04,160 --> 00:16:06,680 Speaker 2: estate and residential real estate as opposed to the large banks, 305 00:16:06,720 --> 00:16:09,640 Speaker 2: which really real estate is a small, small part of 306 00:16:09,680 --> 00:16:11,160 Speaker 2: their loan portfolio. 307 00:16:12,440 --> 00:16:16,160 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 308 00:16:16,240 --> 00:16:19,600 Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto 309 00:16:19,720 --> 00:16:22,800 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 310 00:16:22,840 --> 00:16:25,800 Speaker 1: get your podcasts, or watch us live on YouTube. 311 00:16:26,280 --> 00:16:30,640 Speaker 2: Let's talk new energy finance. I don't know how the 312 00:16:30,680 --> 00:16:33,560 Speaker 2: whole new energy world is going to play out with 313 00:16:33,720 --> 00:16:37,280 Speaker 2: President Trump here. It just feels like, boy, that's a headwind. 314 00:16:38,000 --> 00:16:40,560 Speaker 2: But we're going to break it down. So we've got uh, 315 00:16:41,080 --> 00:16:44,040 Speaker 2: we have here, We've got Paul Ascano, Bloomberg BNF Seniors. 316 00:16:44,040 --> 00:16:48,280 Speaker 2: Sochit So, Paula, how do you guys think about wind, solar? 317 00:16:48,320 --> 00:16:52,880 Speaker 2: I mean, just all these new greener energies just frame 318 00:16:52,920 --> 00:16:56,120 Speaker 2: out for us kind of is it is this administration 319 00:16:56,240 --> 00:16:58,680 Speaker 2: a headwind to that? And if so, by what degree? 320 00:16:58,920 --> 00:17:00,520 Speaker 3: Yeah? And thanks for having I'm back. 321 00:17:02,360 --> 00:17:04,720 Speaker 10: Certainly, every industry we have to we have to look 322 00:17:04,760 --> 00:17:07,720 Speaker 10: at every industry separately and in conjunction. We have to 323 00:17:07,920 --> 00:17:10,760 Speaker 10: align to understand what are the common threats and then 324 00:17:10,840 --> 00:17:14,840 Speaker 10: what are the individual characteristics of each of those industries. 325 00:17:14,880 --> 00:17:20,400 Speaker 10: So so far we've we've seen obviously offshore wind has 326 00:17:20,440 --> 00:17:24,000 Speaker 10: been badly hit, mostly because offshore wind is heavily, heavily 327 00:17:24,080 --> 00:17:30,520 Speaker 10: reliant on federal agencies and federal authority, whereas solar has 328 00:17:30,600 --> 00:17:32,320 Speaker 10: been pretty much unstoppable. 329 00:17:32,440 --> 00:17:33,960 Speaker 3: There's very little things. 330 00:17:34,000 --> 00:17:36,800 Speaker 10: That Trump and the administration can do to really slow 331 00:17:36,880 --> 00:17:41,000 Speaker 10: down growth. And then battery storage with this nation, technology 332 00:17:41,000 --> 00:17:45,200 Speaker 10: that's coming to support both soul and win generation has 333 00:17:45,240 --> 00:17:49,000 Speaker 10: also been i would say somewhere in the middle. Not 334 00:17:49,160 --> 00:17:52,200 Speaker 10: as badly head as offshore wind, but tariffs have had 335 00:17:52,440 --> 00:17:56,920 Speaker 10: much a much bigger impact because the US still imports 336 00:17:56,920 --> 00:17:59,880 Speaker 10: a lot of the batteries from China, because the batteries 337 00:18:00,000 --> 00:18:03,080 Speaker 10: apply chain is not as diversified as a solar or 338 00:18:03,119 --> 00:18:04,040 Speaker 10: the wind supply chain. 339 00:18:04,280 --> 00:18:06,040 Speaker 5: So you guys have a no doubt that talks about 340 00:18:06,040 --> 00:18:09,320 Speaker 5: how US clean power build will caudruple by twenty thirty 341 00:18:09,359 --> 00:18:11,320 Speaker 5: five despite all. 342 00:18:11,200 --> 00:18:13,560 Speaker 3: Of these risks. That's a big number. 343 00:18:14,119 --> 00:18:17,440 Speaker 5: So you mentioned that solar is unstoppable, battery and energy 344 00:18:17,480 --> 00:18:20,200 Speaker 5: storage potentially also, can you walk us through your outlook 345 00:18:20,240 --> 00:18:21,359 Speaker 5: for solar in particular. 346 00:18:21,680 --> 00:18:26,200 Speaker 10: Yeah, the reality is the US and pretty much everywhere 347 00:18:26,200 --> 00:18:30,160 Speaker 10: in the world will need power. What's the fastest, cheapest 348 00:18:30,320 --> 00:18:34,320 Speaker 10: new source of power generation? It's solar like hands down, 349 00:18:34,520 --> 00:18:37,600 Speaker 10: It's easier, quicker, to build. If you can get the 350 00:18:37,640 --> 00:18:40,160 Speaker 10: permits and the great connection on time, which are really 351 00:18:40,200 --> 00:18:43,560 Speaker 10: the only bottlenecks to get to getting new solar built, 352 00:18:44,040 --> 00:18:46,600 Speaker 10: then it's very very hard to stop. And we've seen 353 00:18:46,600 --> 00:18:51,160 Speaker 10: that all over the world, especially now the US gas 354 00:18:51,359 --> 00:18:54,439 Speaker 10: nuclear there's a you know, there's talks about a renaissance 355 00:18:54,480 --> 00:18:58,040 Speaker 10: for both of these technologies. But the reality is is 356 00:18:58,040 --> 00:19:01,800 Speaker 10: that physical there's physicaltions to building gas and to building 357 00:19:01,920 --> 00:19:06,359 Speaker 10: nuclear that probably most of the audience is very familiar with. 358 00:19:06,359 --> 00:19:08,399 Speaker 10: With soul, you don't need pipelines, you don't need to 359 00:19:08,400 --> 00:19:10,640 Speaker 10: build new pipelines, you don't need to improve new pipelines. 360 00:19:10,680 --> 00:19:14,400 Speaker 10: You just grap panels, You install them, you connect them 361 00:19:14,400 --> 00:19:16,119 Speaker 10: to the grid, and that's it. And then you have 362 00:19:16,240 --> 00:19:18,840 Speaker 10: new source and new source of generation. And the reality 363 00:19:18,960 --> 00:19:23,320 Speaker 10: is that despite the efforts from the administration to revitalized 364 00:19:23,680 --> 00:19:27,080 Speaker 10: fossil fuels and nuclear, the easiest thing to build the 365 00:19:27,119 --> 00:19:29,600 Speaker 10: solar and it's and it's going to continue to be 366 00:19:30,000 --> 00:19:31,480 Speaker 10: to be like that for a long time. 367 00:19:31,720 --> 00:19:33,679 Speaker 2: Well, talk to us about the towers here, Like, if 368 00:19:33,720 --> 00:19:36,320 Speaker 2: there's one hundred and forty percent tariff on a battery 369 00:19:36,400 --> 00:19:39,080 Speaker 2: coming in from China, doesn't that make a lot of 370 00:19:39,080 --> 00:19:41,040 Speaker 2: projects just unfeasible economically. 371 00:19:41,119 --> 00:19:45,080 Speaker 10: Yeah, that's a great question. And there's certainly some battery projects, 372 00:19:45,160 --> 00:19:48,560 Speaker 10: big battery projects in parts of the US there are 373 00:19:48,640 --> 00:19:50,960 Speaker 10: going to be delayed. There's going to be probably delayed 374 00:19:51,000 --> 00:19:54,040 Speaker 10: by twelve to eighteen months as everyone figures out what 375 00:19:54,080 --> 00:19:55,119 Speaker 10: the final tariff. 376 00:19:54,880 --> 00:19:55,600 Speaker 3: On China will be. 377 00:19:55,600 --> 00:19:57,600 Speaker 10: But the reality is, if we look at what happened 378 00:19:57,640 --> 00:20:00,680 Speaker 10: to the solar sector and the global soular supply chain 379 00:20:00,720 --> 00:20:03,560 Speaker 10: back in the day when Obama started introducing high tariffs 380 00:20:03,600 --> 00:20:07,639 Speaker 10: on solar panels, supply chains re route very very quickly. 381 00:20:08,000 --> 00:20:11,439 Speaker 10: So we do expect eventually with the next couple of years, 382 00:20:11,520 --> 00:20:14,119 Speaker 10: if tariffs in China continue to be pretty high and 383 00:20:14,160 --> 00:20:17,520 Speaker 10: the risk of using Chinese batteries remains pretty high, irrespective 384 00:20:17,520 --> 00:20:19,840 Speaker 10: of what the tariff level is, we do expect some 385 00:20:20,040 --> 00:20:23,639 Speaker 10: new capacity coming online in South Korea and Southeast Asia 386 00:20:23,680 --> 00:20:26,080 Speaker 10: as well as in the US. 387 00:20:26,880 --> 00:20:30,880 Speaker 5: What about battery storage and energy storage, So. 388 00:20:30,800 --> 00:20:35,600 Speaker 10: Battery storage is as I said, it's what it's mower 389 00:20:35,720 --> 00:20:38,640 Speaker 10: hit for by tariffs and solar because of its reliance 390 00:20:38,680 --> 00:20:41,840 Speaker 10: on China. So we had to we had to re 391 00:20:41,880 --> 00:20:44,439 Speaker 10: assuming a slowdown in new additions because right now the 392 00:20:44,480 --> 00:20:47,280 Speaker 10: ramp up has been pretty quickly, but the role of 393 00:20:47,320 --> 00:20:51,240 Speaker 10: battery storage for power markets has been very, very critical 394 00:20:51,280 --> 00:20:54,640 Speaker 10: over the past couple of years. It has probably arguably 395 00:20:54,680 --> 00:20:58,959 Speaker 10: saved Texas from blackouts in the past twelve eighteen months 396 00:20:59,240 --> 00:21:02,159 Speaker 10: because the bit of batteries to ramp up quickly and 397 00:21:02,359 --> 00:21:07,359 Speaker 10: meet peak demand. It's it's it's really it's fascinating and 398 00:21:07,359 --> 00:21:10,959 Speaker 10: and it's really quick to dispatch, and and and we 399 00:21:11,040 --> 00:21:12,680 Speaker 10: think it's going to play a big and bigger role 400 00:21:12,760 --> 00:21:15,399 Speaker 10: in markets outside of Texas too in the US. 401 00:21:15,640 --> 00:21:18,000 Speaker 2: How hard How hard is it to get connected to 402 00:21:18,040 --> 00:21:19,560 Speaker 2: the grid? If I build a wind farm in the 403 00:21:19,600 --> 00:21:22,720 Speaker 2: middle of West Texas like I saw on land Man, 404 00:21:23,119 --> 00:21:23,880 Speaker 2: they're off the grid. 405 00:21:23,880 --> 00:21:25,920 Speaker 3: How do you get stuff to the grid. It's very 406 00:21:26,040 --> 00:21:26,720 Speaker 3: very difficult. 407 00:21:27,280 --> 00:21:30,199 Speaker 10: The some of the difficulties are obvious when there's a 408 00:21:30,359 --> 00:21:33,200 Speaker 10: very very long distance between where you're building the farm 409 00:21:33,240 --> 00:21:35,560 Speaker 10: and where you want to deliver the power. So you 410 00:21:35,600 --> 00:21:38,040 Speaker 10: need to get transmission built, which means you need to 411 00:21:38,200 --> 00:21:40,920 Speaker 10: get everyone along the way who owns the land where 412 00:21:40,960 --> 00:21:43,359 Speaker 10: that transmission, where those transmission lines are going to be, 413 00:21:43,680 --> 00:21:46,560 Speaker 10: to approve to like allow you to build it, which, 414 00:21:46,600 --> 00:21:48,320 Speaker 10: as I'm sure you can imagine, is a very very 415 00:21:48,320 --> 00:21:52,919 Speaker 10: tedious process. You need different regulatory approvals, and then to 416 00:21:53,000 --> 00:21:57,560 Speaker 10: get connected to the grid, you have to undergo years 417 00:21:57,560 --> 00:22:00,800 Speaker 10: and years of different system studies where they have to 418 00:22:00,840 --> 00:22:03,920 Speaker 10: assess what's going to happen if your wind farm now 419 00:22:03,920 --> 00:22:05,679 Speaker 10: connects to the grid, what's going to happen to all 420 00:22:05,760 --> 00:22:08,840 Speaker 10: the power flows going in all directions. Imagine just doing 421 00:22:08,880 --> 00:22:12,320 Speaker 10: that study for one farm, and they do this for 422 00:22:12,600 --> 00:22:14,800 Speaker 10: pretty much everyone who's applying for the grid at the 423 00:22:14,840 --> 00:22:17,760 Speaker 10: same time or the same grid connection point. So the 424 00:22:17,840 --> 00:22:21,240 Speaker 10: engineering is really really complicated, and it's been by far 425 00:22:21,359 --> 00:22:24,080 Speaker 10: the biggest bottle night of getting any new source of 426 00:22:24,080 --> 00:22:24,760 Speaker 10: power generation. 427 00:22:25,240 --> 00:22:27,440 Speaker 5: And yeah, is it easier to do that or build 428 00:22:27,440 --> 00:22:28,040 Speaker 5: a pipeline? 429 00:22:28,080 --> 00:22:31,119 Speaker 10: Thirty seconds easier to do that than build a pipeline, 430 00:22:31,160 --> 00:22:34,600 Speaker 10: I would say, except if you're in Texas or Louisiana. 431 00:22:34,680 --> 00:22:37,840 Speaker 5: Okay, well that's a fair point. Also, I'm obsessed with 432 00:22:37,840 --> 00:22:39,880 Speaker 5: the transformers, like the thing you need to plug into 433 00:22:39,880 --> 00:22:42,359 Speaker 5: the grid, like just that one piece of equipment is 434 00:22:42,480 --> 00:22:43,520 Speaker 5: the backlog is huge. 435 00:22:43,520 --> 00:22:48,680 Speaker 8: Remembers the frequencies have to match as well, otherwise you 436 00:22:48,920 --> 00:22:50,000 Speaker 8: will have a big problems. 437 00:22:50,080 --> 00:22:53,119 Speaker 5: Hence all the years of study and then also the 438 00:22:53,200 --> 00:22:55,880 Speaker 5: questions of how much alternative or intermittent energy you want 439 00:22:55,920 --> 00:22:58,479 Speaker 5: on a grid. Just ask Spain and they're blackout from 440 00:22:58,520 --> 00:23:00,600 Speaker 5: a couple of weeks ago. It was really great to 441 00:23:00,600 --> 00:23:02,760 Speaker 5: see you. Thank you very very much, Paulo Ascano. He 442 00:23:02,840 --> 00:23:05,159 Speaker 5: joins us from Bloomberg b n EF. They do all 443 00:23:05,160 --> 00:23:08,400 Speaker 5: the great research on energy across the board, whether clean 444 00:23:08,520 --> 00:23:13,000 Speaker 5: energy or otherwise. And they do technology and they do financing. 445 00:23:13,000 --> 00:23:16,400 Speaker 5: It's really quite interesting. You should definitely check out their research. 446 00:23:16,920 --> 00:23:21,600 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 447 00:23:21,800 --> 00:23:25,280 Speaker 1: and anywhere else you get your podcasts. 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