WEBVTT - Merz Confirmed as German Chancellor After Second Parliament Vote 0:00:02.720 --> 0:00:10.560 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.480 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.560 --> 0:00:18.479 Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 0:00:18.600 --> 0:00:21.840 Listen on demand wherever you get your podcasts, or watch 0:00:21.920 --> 0:00:23.040 us live on YouTube. 0:00:24.000 --> 0:00:26.360 Balax Deal Paul Sweeney live here in our Bloomberg Interactive 0:00:26.400 --> 0:00:30.480 Broker's studio. We're streaming live on YouTube as well. To 0:00:30.560 --> 0:00:33.040 check us out there. So it took longer to expect it, 0:00:33.080 --> 0:00:36.879 but Germany now has a chancellor. Ros Mathison joins us 0:00:36.880 --> 0:00:41.920 Bloomberg News Director for Europe, the Middle East and Africa. Ross, 0:00:42.400 --> 0:00:44.239 like most Americans, I woke up to this news and 0:00:44.240 --> 0:00:45.240 then I was like, is that. 0:00:45.159 --> 0:00:47.160 A big deal? Apparently it's a big. 0:00:47.040 --> 0:00:50.080 Deal not getting kind of elected on that first ballot. 0:00:50.080 --> 0:00:51.640 Can you give us the context of there? 0:00:53.479 --> 0:00:55.080 Well, that's right, I mean it was supposed to be 0:00:55.160 --> 0:00:58.200 a pro former moment. It was just to set peace 0:00:58.320 --> 0:01:02.200 vote in Parliament for him to be formally confirmed by 0:01:02.320 --> 0:01:06.000 lawmakers as chancellor. Then he would go off Stark cabinet 0:01:06.240 --> 0:01:09.560 and he was due to go to Paris tomorrow to 0:01:09.680 --> 0:01:12.319 meet with the French leader. So it was all supposed 0:01:12.319 --> 0:01:14.360 to roll off from there, and of course he'd already 0:01:14.680 --> 0:01:18.000 done the work to get these big changes through Parliament 0:01:18.040 --> 0:01:21.039 in terms of removing the debt break on Germany, big 0:01:21.080 --> 0:01:23.760 package around infrastructure and defense. So it was quite shocking 0:01:24.120 --> 0:01:26.640 to see this result given you know that he had 0:01:26.680 --> 0:01:30.679 the numbers in theory to be voted through as chancellor 0:01:30.720 --> 0:01:34.360 by Parliament. The question is who voted against him and 0:01:34.440 --> 0:01:37.000 if so, why, And so we had this second vote 0:01:37.040 --> 0:01:39.000 just a short time ago. He got over the line 0:01:39.040 --> 0:01:41.440 he needed three hundred and sixteen, He got a through 0:01:41.560 --> 0:01:44.600 three hundred and twenty five. So they got there and 0:01:44.640 --> 0:01:47.080 now he will of course go off and be chancellor. 0:01:47.120 --> 0:01:50.520 But the fact this happened is just a really negative 0:01:50.560 --> 0:01:53.400 sign for the start of his administration and for the 0:01:53.440 --> 0:01:56.960 difficulties that will lie ahead potentially getting stuff done with parliament. 0:01:57.320 --> 0:01:58.280 So would we. 0:01:58.720 --> 0:02:01.280 So he already didn't have a mandate, So then now 0:02:01.360 --> 0:02:03.440 is it like an extra non mandate. 0:02:04.720 --> 0:02:07.400 Well, I mean he does. He does have a coalition 0:02:08.000 --> 0:02:11.360 within his with his block and the center left Social Democrats, 0:02:11.360 --> 0:02:14.560 so he's got a functioning coalition in Parliament. But it 0:02:14.680 --> 0:02:17.959 just shows again that there are lots of strands against him, 0:02:18.040 --> 0:02:22.040 even within that coalition, and that some lawmakers may object 0:02:22.080 --> 0:02:25.680 to certain policies. It could be quite difficult to negotiate 0:02:25.800 --> 0:02:30.080 changes to policy, including with the Social Democrats between which 0:02:30.520 --> 0:02:33.040 they're in coalition. And what was the intention of these 0:02:33.120 --> 0:02:36.240 lawmakers in voting against him in this minute was to 0:02:36.280 --> 0:02:38.200 send a signal that you know, they are going to 0:02:38.240 --> 0:02:41.720 be hard on some policy platforms with him, that they're 0:02:41.720 --> 0:02:44.760 not particularly happy that his chance. It's really hard to 0:02:44.800 --> 0:02:48.080 know what happened he today therefore the signals from it, 0:02:48.120 --> 0:02:51.480 but it's not a positive start of confidence really in 0:02:51.520 --> 0:02:52.279 his administration. 0:02:52.400 --> 0:02:55.560 You'd have to say, ros what is the job one 0:02:55.639 --> 0:02:57.920 here for mister Marrison and his government? 0:02:57.960 --> 0:02:58.200 Now? 0:03:00.000 --> 0:03:03.920 Obviously he's worked already to get that depth break lifted, 0:03:03.960 --> 0:03:06.240 which is a really important step for Germany to be 0:03:06.320 --> 0:03:10.640 able to unshackle itself fiscally and to get these infrastructure 0:03:10.680 --> 0:03:14.040 and infrastructure and defense packages moving. But also they've got 0:03:14.040 --> 0:03:16.400 to now work out how to spend the money. You know, 0:03:16.440 --> 0:03:19.000 there's a lot to spend it all with infrastructure, but 0:03:19.040 --> 0:03:22.359 there's a lot of red tape also involved in bureaucracy, 0:03:22.400 --> 0:03:24.920 and so how do you get this money flowing and 0:03:24.960 --> 0:03:27.960 going where it needs to to? Really structurally kickstart the 0:03:28.000 --> 0:03:31.040 German economy. Obviously a lot of external headwinds that you know, 0:03:31.240 --> 0:03:35.920 this is Europe's significant economy to grapple with in terms 0:03:35.920 --> 0:03:39.720 of the Trump administration, tensions on trade, you know what's 0:03:39.760 --> 0:03:43.000 happening in the next steps in Russia's war, in Ukraine 0:03:43.280 --> 0:03:45.200 and so on. In Germany needs to be a big 0:03:45.280 --> 0:03:48.160 voice in all of that. So it's sort of internal 0:03:48.280 --> 0:03:52.280 questions around the economy. But there's also the far right AfD, 0:03:52.560 --> 0:03:55.720 which is the biggest opposition group in Parliament, could be 0:03:55.760 --> 0:03:58.280 pushing him along on things like migration. So he's got 0:03:58.320 --> 0:04:00.600 a bunch of domestic challenges, and then he's got the 0:04:00.640 --> 0:04:03.960 external environment, which is like trade and Ukraine and much 0:04:04.000 --> 0:04:04.480 much more. 0:04:05.120 --> 0:04:06.280 All right, ros, we appreciate it. 0:04:06.320 --> 0:04:08.720 Thank you so very much. Roz Matheson, Bloomberg News Director 0:04:08.760 --> 0:04:11.720 for Europe, Middle East and Africa. Frederick Mertz getting the 0:04:11.800 --> 0:04:14.160 backing of Parliament in a second vote for Germany's a 0:04:14.280 --> 0:04:16.720 next chancellor. This is the latest ballot of lawmakers after 0:04:16.760 --> 0:04:18.719 a failure in the first vote that came to a 0:04:18.720 --> 0:04:23.360 shock as everyone market participants and politicians alike. 0:04:23.480 --> 0:04:28.760 You're listening to the Bloomberg Intelligence podcast Catch US Live 0:04:28.839 --> 0:04:31.960 weekdays at ten am Eastern on Apple, Cocklay and Android 0:04:31.960 --> 0:04:35.279 Auto with the Bloomberg Business app. Listen on demand wherever 0:04:35.320 --> 0:04:38.440 you get your podcasts, or watch US live on YouTube. 0:04:39.000 --> 0:04:41.520 All right, let's keep going with the door dash theme here, 0:04:41.560 --> 0:04:44.120 agreeing to by delivery in a less than of four 0:04:44.160 --> 0:04:47.360 billion dollar deal three point nine billion dollars. Us Mandy 0:04:47.360 --> 0:04:50.599 p Ssening, Bloomberg Intelligence senior tech industry analyst, joins us, Now, 0:04:50.720 --> 0:04:51.760 what do you make of the price tag? 0:04:53.000 --> 0:04:56.480 Well, I mean it's not one of the expensive acquisitions 0:04:56.480 --> 0:05:00.520 that we have seen with these online delivery companies. Multiple 0:05:00.680 --> 0:05:04.159 is quite low. It's about you know, one point two 0:05:04.240 --> 0:05:08.240 times ev do sales. So look, when it comes to 0:05:08.560 --> 0:05:12.320 delivery companies, we know they have had their challenges with 0:05:12.480 --> 0:05:16.920 profitability and that's why you know, Delivery, even though it 0:05:17.160 --> 0:05:20.279 ipoed a few years back at a much higher valuation, 0:05:21.640 --> 0:05:25.320 you know, the selling price is a lot lower because 0:05:25.400 --> 0:05:29.560 of all the execution challenges they had. And in this case, 0:05:29.640 --> 0:05:34.240 I think DoorDash has a proven track record when it 0:05:34.279 --> 0:05:39.040 comes to showing better profitability than they appear, So you know, 0:05:39.120 --> 0:05:42.159 it's it's an easy way for them to expand in 0:05:42.240 --> 0:05:45.760 the UK market given most of their businesses here in 0:05:45.760 --> 0:05:49.039 the US, and so it does make sense. I mean 0:05:49.080 --> 0:05:52.920 the key question is can they implement their playbook and 0:05:53.080 --> 0:05:58.159 make the delivery unit profitable in one to two years? 0:05:58.680 --> 0:06:01.320 And Alex, I know you're to know this information. JP 0:06:01.440 --> 0:06:04.640 Morgan advised DoorDash and Allen and Company and Golden Sacks 0:06:04.680 --> 0:06:07.799 advise a delivery U. So again, bankers getting paid. 0:06:08.080 --> 0:06:09.160 So that's what we like to see. 0:06:09.200 --> 0:06:11.080 I believe in that exactly. Talk to us. 0:06:11.120 --> 0:06:14.640 I'man deep about so, I'm a vowed I do not 0:06:14.760 --> 0:06:17.359 support this home delivery of food thing, and my kids 0:06:17.400 --> 0:06:18.760 know that, and I won't pay for it, and they 0:06:19.120 --> 0:06:20.920 get put in a penalty box if I ever see 0:06:20.960 --> 0:06:23.480 a charge on a credit card. Talk to us about 0:06:23.480 --> 0:06:26.040 the economics of delivering food here in the US versus 0:06:26.960 --> 0:06:29.760 delivery delivery use wherever they are in the UK. 0:06:31.400 --> 0:06:35.360 Yeah, I mean, look this, the three side marketplace businesses 0:06:35.720 --> 0:06:40.120 are not the easiest to run in terms of unit economics. 0:06:40.240 --> 0:06:45.839 And that's why you know, DoorDash has emerged as the 0:06:45.880 --> 0:06:51.159 category leader because not only have they executed better in 0:06:51.240 --> 0:06:55.640 terms of batching efficiencies and really making sure they optimize 0:06:55.720 --> 0:06:58.200 the time of the person who is delivering the order, 0:06:58.560 --> 0:07:01.560 but also they've been able to there on ads. They've 0:07:01.600 --> 0:07:06.080 been able to layer on some technology solutions where they 0:07:06.120 --> 0:07:09.520 would do the app or the website of the merchant 0:07:09.760 --> 0:07:12.240 that they are delivering food from, so they will charge 0:07:12.240 --> 0:07:15.320 them a fee for that. And all these small things 0:07:15.800 --> 0:07:22.960 have added to their profitability in contrast to even an 0:07:23.120 --> 0:07:27.360 Uber eats, which is not as profitable as a door Dashes. 0:07:27.480 --> 0:07:30.320 So that just goes to show that scale is important 0:07:30.360 --> 0:07:33.640 in this business, but also operational execution, and that's what 0:07:33.720 --> 0:07:36.800 I think the door Dash team has delivered since their IPO. 0:07:38.480 --> 0:07:41.320 I guess the question for me is how much runway 0:07:41.840 --> 0:07:45.280 is do these companies have, Like how can they grow 0:07:45.320 --> 0:07:48.320 their total addressable market when in theory like you're not 0:07:48.360 --> 0:07:50.360 going to use this in the middle of a suburb. 0:07:50.400 --> 0:07:51.840 Maybe do in the suburb, but not in like a 0:07:51.920 --> 0:07:55.600 rural area. 0:07:55.800 --> 0:07:58.240 I mean, just look at how much they have grown 0:07:58.520 --> 0:08:01.520 since the pandemic, which is when they got the big bump, 0:08:01.560 --> 0:08:04.800 and since then they've been, like DoorDash has been compounding 0:08:05.520 --> 0:08:09.280 top line at a twenty percent keeger. And the reason 0:08:09.320 --> 0:08:11.760 they've been able to do that is they're pretty much 0:08:11.840 --> 0:08:16.040 doing all last mile delivery. I think Amazon Prime they 0:08:16.040 --> 0:08:19.760 are doing that on the delivery side now with grocery delivery, 0:08:19.920 --> 0:08:23.720 convenience delivery, and that is what gives you the batching 0:08:23.840 --> 0:08:27.320 efficiency in terms of saying, hey, not only are you 0:08:27.560 --> 0:08:30.480 helping me deliver food from the restaurant, but also pick 0:08:30.560 --> 0:08:33.560 up this thing from the convenience store and also this 0:08:33.720 --> 0:08:37.600 grocery So all these thinks I when you look at 0:08:37.600 --> 0:08:40.120 the scale in terms of number of orders and GMV, 0:08:40.280 --> 0:08:43.240 I mean DoorDash may do almost one hundred billion dollars 0:08:43.280 --> 0:08:48.760 in GMV this year. So it just goes to show that, 0:08:49.040 --> 0:08:52.599 you know, there is a market in terms of online 0:08:52.800 --> 0:08:55.360 conversion of a lot of the things that used to 0:08:55.440 --> 0:08:59.079 be done in store. And once you digitize the data, 0:08:59.160 --> 0:09:01.800 you are able to layer on ads and people will 0:09:01.800 --> 0:09:05.160 pay for convenience provided the costs are not that high, 0:09:05.400 --> 0:09:07.280 which is why the delivery side is still a low 0:09:07.320 --> 0:09:11.559 margin business. But it's all these ancillary services that makes 0:09:11.600 --> 0:09:15.520 the company profitable and it comes with scale, so which 0:09:15.600 --> 0:09:17.480 is what orda Asha has been able to achieve. 0:09:17.640 --> 0:09:20.720 Yep, absolutely all right, Mandeve, thank you so much. Sweeney 0:09:20.800 --> 0:09:22.720 Offspring are still not allowed to use any of these 0:09:22.760 --> 0:09:23.559 food delivery. 0:09:23.280 --> 0:09:25.480 Service so they do they still do once. 0:09:25.320 --> 0:09:27.480 On one will sneak by and then I shut off 0:09:27.520 --> 0:09:28.920 the credit cards for I've seen it happen. 0:09:29.120 --> 0:09:33.280 Nothing makes me more angry than seeing a delivery at 0:09:33.360 --> 0:09:36.479 the front door. Just go mental, exactly. 0:09:37.480 --> 0:09:39.480 It is convenience, but it's so expensive and just the 0:09:39.520 --> 0:09:41.200 value is not there for me. All Right, Mandy, you've 0:09:41.200 --> 0:09:43.600 saying he does that stuff for a living for Bloomberg Intelligence. 0:09:45.240 --> 0:09:48.920 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:09:49.000 --> 0:09:52.400 weekdays at ten am Eastern on Applecarclay, and Android Auto 0:09:52.520 --> 0:09:55.560 with the Bloomberg Business App. Listen on demand wherever you 0:09:55.600 --> 0:09:59.679 get your podcasts, or watch us live on YouTube. 0:10:00.080 --> 0:10:03.680 Of the topics at Alex I like to revisit on 0:10:03.960 --> 0:10:06.280 occasion is the commercial real estate business. Talking about a 0:10:06.320 --> 0:10:09.080 business that was really impacted by the pandemic, particularly in 0:10:09.120 --> 0:10:11.240 some of the larger markets like New York City, so 0:10:11.440 --> 0:10:14.040 it's wrong. We like chatting with our next guest, Best Friedman. 0:10:14.280 --> 0:10:17.839 She's the chief executive officer at Brown Harris Stevens. She's 0:10:17.920 --> 0:10:19.640 joining us from New York City via the Zoom thing. 0:10:19.880 --> 0:10:23.520 Best thanks so much for joining us here here on 0:10:23.600 --> 0:10:26.920 Lexington Avenue, fifty eighth Street. We've still got a lot 0:10:26.920 --> 0:10:30.360 of vacant retail. Talk to us about that part of 0:10:30.400 --> 0:10:31.000 the market here. 0:10:32.040 --> 0:10:34.920 Yeah, I mean, I think you're seeing two different narratives. 0:10:35.520 --> 0:10:38.080 You know, you're seeing openings, but you're also seeing a 0:10:38.080 --> 0:10:39.120 lot of closings. 0:10:39.200 --> 0:10:41.679 And we're just not out of the woods yet. 0:10:42.320 --> 0:10:44.880 We started to see the early stages of what I 0:10:44.880 --> 0:10:48.719 would describe as a moderate recovery. But there's still some 0:10:48.760 --> 0:10:53.200 great challenges, specifically in places like New York City. In 0:10:53.240 --> 0:10:57.120 San Francisco, I know, has similar challenges, and we need 0:10:57.120 --> 0:11:02.440 to address issues like homelessness, crime, all of those sorts 0:11:02.440 --> 0:11:05.680 of things need to be addressed in safety, and it's 0:11:05.720 --> 0:11:08.400 impacting our city overall. 0:11:08.600 --> 0:11:11.000 And so we're getting there. We've made progress. 0:11:11.320 --> 0:11:13.960 Last year was better than twenty twenty three, for sure, 0:11:14.480 --> 0:11:17.680 wasn't as good as twenty twenty two. And some sectors 0:11:17.720 --> 0:11:22.080 are performing better than others. A multifamily performed really well 0:11:22.400 --> 0:11:24.079 and it's continuing. 0:11:23.480 --> 0:11:24.000 To do so. 0:11:25.160 --> 0:11:29.000 And nationwide, vacancy rates are at something like seventeen percent 0:11:29.559 --> 0:11:31.800 or in New York City at seventeen. I think nationwide 0:11:31.840 --> 0:11:35.600 it's fourteen and so for the quarter one twenty twenty five, 0:11:35.679 --> 0:11:37.120 So look, it's a mixed bag. 0:11:37.160 --> 0:11:38.680 There's some good and there's bad. 0:11:39.200 --> 0:11:42.280 What is the most misunderstood piece of the commercial real 0:11:42.400 --> 0:11:43.640 estate market right now? 0:11:45.679 --> 0:11:48.920 You know, I think that you know you're hearing there 0:11:49.000 --> 0:11:51.120 was a lot of doom and gloom that people were 0:11:51.160 --> 0:11:55.520 talking about, you know, in early on after COVID, and 0:11:55.600 --> 0:11:58.200 I think you've seen a decent recovery and the demand 0:11:58.320 --> 0:12:02.120 is there, and there is demand for office space, just FYI, 0:12:02.200 --> 0:12:03.520 I think that's misunderstood. 0:12:03.559 --> 0:12:06.320 There are people that do want to be in the offices. 0:12:06.360 --> 0:12:09.640 People are requiring it in New York City, and I 0:12:09.640 --> 0:12:11.800 think that's a good thing. But the demand is for 0:12:11.960 --> 0:12:15.160 quality and I think you know, the B and C 0:12:15.520 --> 0:12:19.120 office spaces, we're gonna have to do something with those. 0:12:19.440 --> 0:12:21.960 But I do think people have returned to the office, 0:12:22.120 --> 0:12:24.920 want to be here, even if it's partial and there's 0:12:25.040 --> 0:12:29.040 hybrid working. I think that you know, that is misunderstood. 0:12:29.080 --> 0:12:32.640 There's not this sort of work from home across the country. 0:12:34.240 --> 0:12:36.000 Hey, best talk to those about just kind of the 0:12:36.520 --> 0:12:38.960 lending markets here. Let's say I wanted to develop a 0:12:38.960 --> 0:12:40.440 property or buy a building. 0:12:41.360 --> 0:12:42.840 Is my local bank going to be there for me? 0:12:43.760 --> 0:12:46.880 Depends, I mean, it all depends on what building, who 0:12:46.960 --> 0:12:49.400 you are, you know, it's all of those issues. 0:12:49.480 --> 0:12:51.359 All of those things are are important. 0:12:52.360 --> 0:12:55.920 And you know, there are some loans becoming due at 0:12:55.920 --> 0:12:58.640 the end of this year and next year. I think 0:12:58.720 --> 0:13:01.840 next year, twenty two, twenty six, some loans are maturing 0:13:02.480 --> 0:13:04.920 in the commercial realm. It's something like one point eight 0:13:04.960 --> 0:13:09.560 trillion dollars, So that's what people are concerned about. But yes, 0:13:10.200 --> 0:13:12.600 there is money out there and people will lend. It's 0:13:12.640 --> 0:13:15.600 tighter than it has been. Credit has been really hard. 0:13:16.480 --> 0:13:18.400 But at the end of the day, if you have 0:13:18.960 --> 0:13:21.640 are somebody that has done projects and people will lent 0:13:21.720 --> 0:13:23.600 to you and it's the right project and it makes 0:13:23.600 --> 0:13:24.720 sense and you can prove it. 0:13:24.880 --> 0:13:27.440 Yes, but it's not what it was, you know. 0:13:27.559 --> 0:13:33.160 I think the economic uncertainty, the higher rates, inflation, even tariffs, 0:13:33.240 --> 0:13:37.360 all of that stuff, you know, has people rethinking things 0:13:37.480 --> 0:13:39.880 and being a little bit more cautious. 0:13:40.480 --> 0:13:42.520 I think everyone was kind of waiting for the big 0:13:42.559 --> 0:13:45.960 fallout to happen and it never really did. Does that 0:13:46.040 --> 0:13:48.319 eventually happen or is it going to be on sort 0:13:48.320 --> 0:13:52.319 of property to property rolling basis over the long term. 0:13:52.800 --> 0:13:54.600 Yeah, I don't know if there's going to I mean, 0:13:55.080 --> 0:13:58.839 predictions are impossible. We none of us know really because 0:13:58.840 --> 0:14:02.040 every day is a different news story and what's going 0:14:02.080 --> 0:14:05.600 on in the economy. So I don't know if there's 0:14:05.640 --> 0:14:09.040 going to be some sort of huge fallout, if it's 0:14:09.080 --> 0:14:09.880 going to get rougher. 0:14:10.000 --> 0:14:12.320 It could, but I do think it's depends. 0:14:12.360 --> 0:14:14.520 It's almost like if you look at retail, which is 0:14:14.559 --> 0:14:18.480 a mixed bag. You see, you know, Walmart's opening up 0:14:18.559 --> 0:14:22.320 and Trader Joe's opening up, but then you see Walgreens closing, 0:14:22.480 --> 0:14:25.840 and so you know it's and so it just depends 0:14:25.840 --> 0:14:28.760 on what it is. You know, there's it depends on 0:14:28.880 --> 0:14:33.160 what is happening and what the business is and where 0:14:33.160 --> 0:14:34.840 it is and all of those things. 0:14:36.160 --> 0:14:39.200 Best talk to us about South Florida. 0:14:39.320 --> 0:14:41.200 Is it still strong or is it rolled over? 0:14:42.480 --> 0:14:45.880 You know, South Storea, Florida is is doing well. It's 0:14:45.920 --> 0:14:50.280 it's it's decent. It's it's it's steady. There's demand. Uh, 0:14:50.320 --> 0:14:53.000 And you know, I think there was an article today 0:14:53.080 --> 0:14:58.120 in the Journal about Florida and the demand for real estate. 0:14:58.160 --> 0:15:01.240 There is decent people but want to be in Florida, 0:15:02.200 --> 0:15:05.520 and there has been this sort of migration of businesses 0:15:05.600 --> 0:15:08.600 moving to Florida, and so I think that has remained 0:15:08.640 --> 0:15:11.880 the same. I don't see that changing anytime soon, so 0:15:12.760 --> 0:15:14.760 we'll have to see all right. 0:15:14.800 --> 0:15:16.560 Best, Thank you so much for joining us. Always appreciate 0:15:16.600 --> 0:15:19.720 getting your perspective. Best for reading. She is the chief 0:15:20.280 --> 0:15:23.920 chief executive officer of Brown Harris Steven's giving us an 0:15:24.000 --> 0:15:26.440 update on kind of global real estate. Again, a little 0:15:26.440 --> 0:15:29.480 bit of uncertainty out there in just the overall economy 0:15:29.520 --> 0:15:31.760 even finding its way into the real estate maybe not 0:15:31.800 --> 0:15:34.920 going to hold off on a certain project, or hold 0:15:34.960 --> 0:15:36.480 off on upgrading or something along. 0:15:36.560 --> 0:15:38.320 I feel like this reminds me of the default cycle 0:15:38.360 --> 0:15:40.960 we were supposed to see in twenty sixteen, Like that 0:15:41.080 --> 0:15:43.400 huge fallout that was supposed to happen that all the 0:15:44.560 --> 0:15:46.120 private guys were all excited about. 0:15:46.160 --> 0:15:47.920 That huge wave didn't happen. 0:15:48.040 --> 0:15:50.960 It didn't mean there weren't opportunities, but that wave didn't happen. 0:15:51.000 --> 0:15:53.280 It feels like something similar is also evolving in the 0:15:53.320 --> 0:15:55.800 commercial real estate space as well. 0:15:56.000 --> 0:15:58.080 Yeah, and we were told by a lot of bank 0:15:58.120 --> 0:16:00.680 anlysts that you'd see probably more in the small, mid 0:16:00.720 --> 0:16:04.040 sized banks who maybe had some more local commercial real 0:16:04.160 --> 0:16:06.680 estate and residential real estate as opposed to the large banks, 0:16:06.720 --> 0:16:09.640 which really real estate is a small, small part of 0:16:09.680 --> 0:16:11.160 their loan portfolio. 0:16:12.440 --> 0:16:16.160 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:16.240 --> 0:16:19.600 weekdays at ten am Eastern on Applecarplay and Android Auto 0:16:19.720 --> 0:16:22.800 with the Bloomberg Business App. Listen on demand wherever you 0:16:22.840 --> 0:16:25.800 get your podcasts, or watch us live on YouTube. 0:16:26.280 --> 0:16:30.640 Let's talk new energy finance. I don't know how the 0:16:30.680 --> 0:16:33.560 whole new energy world is going to play out with 0:16:33.720 --> 0:16:37.280 President Trump here. It just feels like, boy, that's a headwind. 0:16:38.000 --> 0:16:40.560 But we're going to break it down. So we've got uh, 0:16:41.080 --> 0:16:44.040 we have here, We've got Paul Ascano, Bloomberg BNF Seniors. 0:16:44.040 --> 0:16:48.280 Sochit So, Paula, how do you guys think about wind, solar? 0:16:48.320 --> 0:16:52.880 I mean, just all these new greener energies just frame 0:16:52.920 --> 0:16:56.120 out for us kind of is it is this administration 0:16:56.240 --> 0:16:58.680 a headwind to that? And if so, by what degree? 0:16:58.920 --> 0:17:00.520 Yeah? And thanks for having I'm back. 0:17:02.360 --> 0:17:04.720 Certainly, every industry we have to we have to look 0:17:04.760 --> 0:17:07.720 at every industry separately and in conjunction. We have to 0:17:07.920 --> 0:17:10.760 align to understand what are the common threats and then 0:17:10.840 --> 0:17:14.840 what are the individual characteristics of each of those industries. 0:17:14.880 --> 0:17:20.400 So so far we've we've seen obviously offshore wind has 0:17:20.440 --> 0:17:24.000 been badly hit, mostly because offshore wind is heavily, heavily 0:17:24.080 --> 0:17:30.520 reliant on federal agencies and federal authority, whereas solar has 0:17:30.600 --> 0:17:32.320 been pretty much unstoppable. 0:17:32.440 --> 0:17:33.960 There's very little things. 0:17:34.000 --> 0:17:36.800 That Trump and the administration can do to really slow 0:17:36.880 --> 0:17:41.000 down growth. And then battery storage with this nation, technology 0:17:41.000 --> 0:17:45.200 that's coming to support both soul and win generation has 0:17:45.240 --> 0:17:49.000 also been i would say somewhere in the middle. Not 0:17:49.160 --> 0:17:52.200 as badly head as offshore wind, but tariffs have had 0:17:52.440 --> 0:17:56.920 much a much bigger impact because the US still imports 0:17:56.920 --> 0:17:59.880 a lot of the batteries from China, because the batteries 0:18:00.000 --> 0:18:03.080 apply chain is not as diversified as a solar or 0:18:03.119 --> 0:18:04.040 the wind supply chain. 0:18:04.280 --> 0:18:06.040 So you guys have a no doubt that talks about 0:18:06.040 --> 0:18:09.320 how US clean power build will caudruple by twenty thirty 0:18:09.359 --> 0:18:11.320 five despite all. 0:18:11.200 --> 0:18:13.560 Of these risks. That's a big number. 0:18:14.119 --> 0:18:17.440 So you mentioned that solar is unstoppable, battery and energy 0:18:17.480 --> 0:18:20.200 storage potentially also, can you walk us through your outlook 0:18:20.240 --> 0:18:21.359 for solar in particular. 0:18:21.680 --> 0:18:26.200 Yeah, the reality is the US and pretty much everywhere 0:18:26.200 --> 0:18:30.160 in the world will need power. What's the fastest, cheapest 0:18:30.320 --> 0:18:34.320 new source of power generation? It's solar like hands down, 0:18:34.520 --> 0:18:37.600 It's easier, quicker, to build. If you can get the 0:18:37.640 --> 0:18:40.160 permits and the great connection on time, which are really 0:18:40.200 --> 0:18:43.560 the only bottlenecks to get to getting new solar built, 0:18:44.040 --> 0:18:46.600 then it's very very hard to stop. And we've seen 0:18:46.600 --> 0:18:51.160 that all over the world, especially now the US gas 0:18:51.359 --> 0:18:54.439 nuclear there's a you know, there's talks about a renaissance 0:18:54.480 --> 0:18:58.040 for both of these technologies. But the reality is is 0:18:58.040 --> 0:19:01.800 that physical there's physicaltions to building gas and to building 0:19:01.920 --> 0:19:06.359 nuclear that probably most of the audience is very familiar with. 0:19:06.359 --> 0:19:08.399 With soul, you don't need pipelines, you don't need to 0:19:08.400 --> 0:19:10.640 build new pipelines, you don't need to improve new pipelines. 0:19:10.680 --> 0:19:14.400 You just grap panels, You install them, you connect them 0:19:14.400 --> 0:19:16.119 to the grid, and that's it. And then you have 0:19:16.240 --> 0:19:18.840 new source and new source of generation. And the reality 0:19:18.960 --> 0:19:23.320 is that despite the efforts from the administration to revitalized 0:19:23.680 --> 0:19:27.080 fossil fuels and nuclear, the easiest thing to build the 0:19:27.119 --> 0:19:29.600 solar and it's and it's going to continue to be 0:19:30.000 --> 0:19:31.480 to be like that for a long time. 0:19:31.720 --> 0:19:33.679 Well, talk to us about the towers here, Like, if 0:19:33.720 --> 0:19:36.320 there's one hundred and forty percent tariff on a battery 0:19:36.400 --> 0:19:39.080 coming in from China, doesn't that make a lot of 0:19:39.080 --> 0:19:41.040 projects just unfeasible economically. 0:19:41.119 --> 0:19:45.080 Yeah, that's a great question. And there's certainly some battery projects, 0:19:45.160 --> 0:19:48.560 big battery projects in parts of the US there are 0:19:48.640 --> 0:19:50.960 going to be delayed. There's going to be probably delayed 0:19:51.000 --> 0:19:54.040 by twelve to eighteen months as everyone figures out what 0:19:54.080 --> 0:19:55.119 the final tariff. 0:19:54.880 --> 0:19:55.600 On China will be. 0:19:55.600 --> 0:19:57.600 But the reality is, if we look at what happened 0:19:57.640 --> 0:20:00.680 to the solar sector and the global soular supply chain 0:20:00.720 --> 0:20:03.560 back in the day when Obama started introducing high tariffs 0:20:03.600 --> 0:20:07.639 on solar panels, supply chains re route very very quickly. 0:20:08.000 --> 0:20:11.439 So we do expect eventually with the next couple of years, 0:20:11.520 --> 0:20:14.119 if tariffs in China continue to be pretty high and 0:20:14.160 --> 0:20:17.520 the risk of using Chinese batteries remains pretty high, irrespective 0:20:17.520 --> 0:20:19.840 of what the tariff level is, we do expect some 0:20:20.040 --> 0:20:23.639 new capacity coming online in South Korea and Southeast Asia 0:20:23.680 --> 0:20:26.080 as well as in the US. 0:20:26.880 --> 0:20:30.880 What about battery storage and energy storage, So. 0:20:30.800 --> 0:20:35.600 Battery storage is as I said, it's what it's mower 0:20:35.720 --> 0:20:38.640 hit for by tariffs and solar because of its reliance 0:20:38.680 --> 0:20:41.840 on China. So we had to we had to re 0:20:41.880 --> 0:20:44.439 assuming a slowdown in new additions because right now the 0:20:44.480 --> 0:20:47.280 ramp up has been pretty quickly, but the role of 0:20:47.320 --> 0:20:51.240 battery storage for power markets has been very, very critical 0:20:51.280 --> 0:20:54.640 over the past couple of years. It has probably arguably 0:20:54.680 --> 0:20:58.959 saved Texas from blackouts in the past twelve eighteen months 0:20:59.240 --> 0:21:02.159 because the bit of batteries to ramp up quickly and 0:21:02.359 --> 0:21:07.359 meet peak demand. It's it's it's really it's fascinating and 0:21:07.359 --> 0:21:10.959 and it's really quick to dispatch, and and and we 0:21:11.040 --> 0:21:12.680 think it's going to play a big and bigger role 0:21:12.760 --> 0:21:15.399 in markets outside of Texas too in the US. 0:21:15.640 --> 0:21:18.000