1
00:00:10,360 --> 00:00:14,720
Speaker 1: Hello, and welcome to another episode of The Odd Lots Podcast.

2
00:00:14,840 --> 00:00:19,800
Speaker 1: I'm Joe Wisenthal and Tracy. I'm not sure if you remember,

3
00:00:19,880 --> 00:00:23,360
Speaker 1: but we did an episode recently. In the outro and

4
00:00:23,440 --> 00:00:26,040
Speaker 1: like someone tweeted about this, I think your final line

5
00:00:26,200 --> 00:00:28,240
Speaker 1: was it's pretty good to be a landlord. Like we're

6
00:00:28,320 --> 00:00:30,080
Speaker 1: talking about rant and you're like, it seems good to

7
00:00:30,080 --> 00:00:31,920
Speaker 1: be a landlord. I stand by it. I can't believe

8
00:00:31,960 --> 00:00:36,160
Speaker 1: I'm getting criticized throwing out these truth bombs it's good

9
00:00:36,200 --> 00:00:38,440
Speaker 1: to be a landlord. No, I don't think it's even

10
00:00:38,479 --> 00:00:42,000
Speaker 1: a criticism. It's like, sometimes the truest things are the

11
00:00:42,040 --> 00:00:44,920
Speaker 1: obvious things that no one says directly, and that someone

12
00:00:45,000 --> 00:00:47,559
Speaker 1: just says it's like, it seems pretty good. And like

13
00:00:48,000 --> 00:00:51,560
Speaker 1: rent prices as we've been discussing, like they never seemed

14
00:00:51,600 --> 00:00:54,840
Speaker 1: to go down. They're all kinds of tax advantages. It

15
00:00:54,920 --> 00:00:58,360
Speaker 1: seems like to owning real estate, it's hard to build

16
00:00:58,400 --> 00:01:01,960
Speaker 1: more of. It seems pretty good. It seems good. I

17
00:01:01,960 --> 00:01:05,080
Speaker 1: guess my question is was it always this good? And

18
00:01:05,280 --> 00:01:08,640
Speaker 1: will it always be this good? Because I mean, the

19
00:01:08,720 --> 00:01:11,080
Speaker 1: reason we're talking about it is because it does feel

20
00:01:11,120 --> 00:01:14,320
Speaker 1: like there is a backlash at the moment or more

21
00:01:14,360 --> 00:01:17,160
Speaker 1: of a backlash. I guess landlords are never an especially

22
00:01:17,200 --> 00:01:21,160
Speaker 1: beloved social class, but with prices being what they are

23
00:01:21,200 --> 00:01:23,800
Speaker 1: at the moment, with rents going up, particularly in places

24
00:01:23,800 --> 00:01:25,520
Speaker 1: like New York City, it does feel like there is

25
00:01:25,520 --> 00:01:28,840
Speaker 1: this question of whether or not maybe the government, the

26
00:01:29,000 --> 00:01:33,039
Speaker 1: state could do something to attenuate those higher rent prices.

27
00:01:33,080 --> 00:01:36,680
Speaker 1: I guess there's like two questions to my mind about

28
00:01:37,040 --> 00:01:39,880
Speaker 1: the sort of like whether it's good to be a landlord.

29
00:01:39,959 --> 00:01:42,080
Speaker 1: And one is like, Okay, we do know that like

30
00:01:42,840 --> 00:01:44,840
Speaker 1: probably like rent growth there's going to slow. And we

31
00:01:44,959 --> 00:01:48,200
Speaker 1: talked to the guy from Apartment List, Chris Selvia Obvious,

32
00:01:48,200 --> 00:01:50,760
Speaker 1: several weeks ago, and it's like, Okay, probably like rents

33
00:01:50,760 --> 00:01:53,360
Speaker 1: are going to come down a bit maybe or flat

34
00:01:53,440 --> 00:01:56,160
Speaker 1: or maybe not grow. But like there's just a cycle thing, right.

35
00:01:56,480 --> 00:01:58,600
Speaker 1: And then there's the question of like is there something

36
00:01:58,680 --> 00:02:02,400
Speaker 1: deeper that's not just about like the macroeconomic cycle, but

37
00:02:02,680 --> 00:02:06,080
Speaker 1: is something can like change about the business. And you know,

38
00:02:06,160 --> 00:02:08,760
Speaker 1: like one thing that I sort of still kind of

39
00:02:08,760 --> 00:02:12,760
Speaker 1: believe in markets is that like if there's like elpha somewhere,

40
00:02:13,280 --> 00:02:18,240
Speaker 1: if there's above market returns, it can't stay forever. Eventually,

41
00:02:18,280 --> 00:02:20,360
Speaker 1: like it's got to get arbed away, right. I think

42
00:02:20,520 --> 00:02:22,560
Speaker 1: maybe I'm a little bit more cynical than you. I

43
00:02:22,560 --> 00:02:25,720
Speaker 1: think people will try to hang on to their price

44
00:02:25,760 --> 00:02:28,679
Speaker 1: advantage as long as they possibly can. Yeah, No, I

45
00:02:28,760 --> 00:02:31,240
Speaker 1: mean I agree, it's just like they can't be like

46
00:02:31,360 --> 00:02:35,120
Speaker 1: some business there's just like permanently benefit all the other businesses, right, Like,

47
00:02:36,000 --> 00:02:38,520
Speaker 1: it's not how markets, their capitalism are supposed to work.

48
00:02:38,520 --> 00:02:40,880
Speaker 1: Like capital is supposed to flood in or supply is

49
00:02:40,880 --> 00:02:44,079
Speaker 1: supposed to come on, and eventually the returns from asset

50
00:02:44,160 --> 00:02:47,320
Speaker 1: A on a risk adjusted basis should equal the returns

51
00:02:47,320 --> 00:02:50,440
Speaker 1: from asset B. Also you know, on a vol adjusted

52
00:02:50,440 --> 00:02:52,399
Speaker 1: basis or something that. Well, I guess this is where

53
00:02:52,440 --> 00:02:56,320
Speaker 1: we start talking about real world constraints and policy constraints again.

54
00:02:56,400 --> 00:03:00,320
Speaker 1: But yes, in theory it should change. Right. So we

55
00:03:00,400 --> 00:03:03,640
Speaker 1: have been you know, talking about you know, real estate

56
00:03:03,720 --> 00:03:06,359
Speaker 1: quite a lot. And I do think that in this

57
00:03:06,400 --> 00:03:10,520
Speaker 1: sort of like pandemic slash post pandemic environment, lots of

58
00:03:10,560 --> 00:03:13,760
Speaker 1: anxiety about real estate, not just like high you know,

59
00:03:14,120 --> 00:03:19,040
Speaker 1: high costs are a huge aspect of it. Availability the

60
00:03:19,120 --> 00:03:22,240
Speaker 1: types of real estate that people want, and so it's

61
00:03:22,280 --> 00:03:24,760
Speaker 1: like a good question to like how good has the

62
00:03:24,840 --> 00:03:27,919
Speaker 1: landlord market been, and if we're at a period where

63
00:03:27,919 --> 00:03:30,680
Speaker 1: a lot of things are changing, rates are reversing, it's

64
00:03:30,680 --> 00:03:32,440
Speaker 1: about to say I think interest rates are going to

65
00:03:32,480 --> 00:03:35,120
Speaker 1: be the big factor here, leverage, huge aspect of the

66
00:03:35,160 --> 00:03:39,280
Speaker 1: real estate business reversing. Can the golden age of being

67
00:03:39,280 --> 00:03:43,960
Speaker 1: a landlord persist? If many other macro things in political

68
00:03:43,960 --> 00:03:46,360
Speaker 1: things are changing? Is it still good to be a landlord?

69
00:03:46,440 --> 00:03:48,920
Speaker 1: Is it's still good to be a landlord? All right, Well,

70
00:03:48,960 --> 00:03:51,720
Speaker 1: I'm very excited about about our gift. We're going to

71
00:03:51,800 --> 00:03:54,480
Speaker 1: be speaking with Ben Carlos type in. He is a

72
00:03:54,520 --> 00:03:58,440
Speaker 1: real estate investor and broker in New York City and

73
00:03:58,480 --> 00:04:01,800
Speaker 1: he has a lot of use on this question and

74
00:04:01,880 --> 00:04:04,200
Speaker 1: why maybe the golden age is coming to an end?

75
00:04:04,480 --> 00:04:07,040
Speaker 1: Or will so? Ben, thank you so much for coming

76
00:04:07,040 --> 00:04:09,160
Speaker 1: on odd lots, glad to be here, thanks for having

77
00:04:09,160 --> 00:04:12,760
Speaker 1: me so. Before we can even ask the question is

78
00:04:12,800 --> 00:04:15,360
Speaker 1: the golden age of being a landlord coming to an end?

79
00:04:15,440 --> 00:04:19,039
Speaker 1: We have to first establish was there really a golden age?

80
00:04:19,040 --> 00:04:21,839
Speaker 1: And I guess the question the way I think about that.

81
00:04:22,600 --> 00:04:28,200
Speaker 1: Is it true that real estate owners, landlords, people who

82
00:04:28,320 --> 00:04:33,400
Speaker 1: rented out their units enjoyed a period of unusually high

83
00:04:33,440 --> 00:04:37,680
Speaker 1: and stable returns. Yeah, So I mean, first, I think

84
00:04:37,680 --> 00:04:39,960
Speaker 1: it's important to make a distinction between different types of

85
00:04:39,960 --> 00:04:45,760
Speaker 1: real estate owners, residential rental landlords and commercial landlords, and

86
00:04:45,960 --> 00:04:49,000
Speaker 1: even homeowners. I'm going to talk today mostly about residential

87
00:04:49,080 --> 00:04:51,840
Speaker 1: landlords and homeowners. And you are a residential I am

88
00:04:51,880 --> 00:04:54,239
Speaker 1: a residential landlord in addition to me a commercial landlord,

89
00:04:54,279 --> 00:04:57,000
Speaker 1: and I'm also also a broker that deals with a

90
00:04:57,040 --> 00:04:59,960
Speaker 1: lot of other residential landlords and investors, okay, on daily basis.

91
00:05:00,560 --> 00:05:04,080
Speaker 1: So what is this goal tell Us established for us?

92
00:05:04,120 --> 00:05:06,120
Speaker 1: The third, in fact, has been a golden age. So

93
00:05:06,160 --> 00:05:08,039
Speaker 1: I think in order to understand there's a golden age,

94
00:05:08,040 --> 00:05:12,120
Speaker 1: you have to understand the history that preceded it. So

95
00:05:12,440 --> 00:05:15,720
Speaker 1: you know, there's this great paper by this professor Katerina

96
00:05:15,960 --> 00:05:18,120
Speaker 1: Nolf from the University of bond that looks at the

97
00:05:18,160 --> 00:05:20,960
Speaker 1: house housing prices over time from eighteen seventy to present,

98
00:05:21,720 --> 00:05:25,520
Speaker 1: and she studies fourteen countries, including the United States, and

99
00:05:25,760 --> 00:05:30,279
Speaker 1: what she found is that up until around nineteen fifty

100
00:05:30,440 --> 00:05:33,320
Speaker 1: depends on the country. In the United States is probably

101
00:05:33,320 --> 00:05:37,719
Speaker 1: the late sixties, housing prices are relatively flat, and then

102
00:05:37,800 --> 00:05:44,119
Speaker 1: after that they've exploded. And that's housing housing data rent

103
00:05:44,160 --> 00:05:47,760
Speaker 1: and otherwise is notoriously difficult to capture because it's a

104
00:05:48,120 --> 00:05:52,600
Speaker 1: such a disparate distributed market. But you know, that backs

105
00:05:52,680 --> 00:05:55,359
Speaker 1: up with qualitative observations as well. So like, there's this

106
00:05:55,440 --> 00:05:58,400
Speaker 1: great book that I recommend everyone read about the history

107
00:05:58,400 --> 00:06:01,040
Speaker 1: of these New York City real estate families called Skyscaper Dreams.

108
00:06:01,520 --> 00:06:04,159
Speaker 1: And there's a recurring theme in this book of sort

109
00:06:04,200 --> 00:06:07,720
Speaker 1: of the residential the families that specialized in department buildings

110
00:06:07,760 --> 00:06:11,080
Speaker 1: complaining about not being at getting as rich as quickly

111
00:06:11,120 --> 00:06:15,120
Speaker 1: as the office developers or the office landlords because you know,

112
00:06:15,400 --> 00:06:17,800
Speaker 1: partly because of rent control. But it was just a

113
00:06:17,839 --> 00:06:22,320
Speaker 1: sleep er business. So what changed in the mid twentieth

114
00:06:22,320 --> 00:06:25,240
Speaker 1: century A couple of different things we were all familiar,

115
00:06:25,400 --> 00:06:29,000
Speaker 1: imagine with the story of like the subsidization of homeowners

116
00:06:29,000 --> 00:06:34,040
Speaker 1: and single family homes and the suburbs. And simultaneously as

117
00:06:34,080 --> 00:06:38,400
Speaker 1: that was occurring, in terms of the public's investment in

118
00:06:38,440 --> 00:06:43,279
Speaker 1: the apartment business, in rental housing, it's shifted from public

119
00:06:43,320 --> 00:06:46,960
Speaker 1: housing to private sextra solutions, whether it's you know, Freddie

120
00:06:46,960 --> 00:06:54,720
Speaker 1: Mack subsidizing multi family developers or even you know, nonprofit developers.

121
00:06:54,920 --> 00:06:59,280
Speaker 1: Simultaneously with that, land news controls were implemented to protect

122
00:06:59,360 --> 00:07:02,440
Speaker 1: the investments of homeowners. That would that's sort of the best,

123
00:07:02,600 --> 00:07:04,680
Speaker 1: the most generous way to describe it. It also did

124
00:07:04,680 --> 00:07:09,040
Speaker 1: things like enforced defective segregation and school segregation and all

125
00:07:09,080 --> 00:07:14,160
Speaker 1: sorts of other less less noble things. So in the

126
00:07:14,440 --> 00:07:17,600
Speaker 1: late seventies, after all this had happened for a decade

127
00:07:17,640 --> 00:07:21,360
Speaker 1: or two, what you had is this coalition form of

128
00:07:21,360 --> 00:07:25,160
Speaker 1: homeowners and conservative interests, both you know, business and otherwise

129
00:07:26,760 --> 00:07:29,200
Speaker 1: teaming up to pair back rent regulations where they existed,

130
00:07:29,640 --> 00:07:35,600
Speaker 1: banned them where they didn't exist, and generally implement set

131
00:07:35,600 --> 00:07:40,800
Speaker 1: of policies that discriminated against renters, either directly via things

132
00:07:40,840 --> 00:07:45,200
Speaker 1: like property tax policy or indirectly because most renters at

133
00:07:45,200 --> 00:07:48,240
Speaker 1: that time were of you know, some sort of marginalized

134
00:07:48,280 --> 00:07:54,560
Speaker 1: status socio economically, so um, you know, they also paired

135
00:07:54,560 --> 00:07:58,679
Speaker 1: back the state's ability to regulate landlords, both in practice

136
00:07:58,720 --> 00:08:01,320
Speaker 1: but um i'd say more usually in terms of state

137
00:08:01,320 --> 00:08:05,840
Speaker 1: capacity to you know, actually effectively punish landlords from misbehavior. So,

138
00:08:05,880 --> 00:08:10,000
Speaker 1: for instance, in the original UM rent stabilization program in

139
00:08:10,000 --> 00:08:13,160
Speaker 1: New York City, there was a way for the buildings

140
00:08:13,560 --> 00:08:18,800
Speaker 1: UM if they were violating certain standards UM to be uh,

141
00:08:18,840 --> 00:08:20,920
Speaker 1: you know, their rents to be you know, paired back,

142
00:08:20,960 --> 00:08:23,480
Speaker 1: and the state could take to take control of these

143
00:08:23,480 --> 00:08:25,760
Speaker 1: buildings in a more assertive way. That that was then

144
00:08:25,840 --> 00:08:28,800
Speaker 1: that was then removed. So let's, you know, before I

145
00:08:28,800 --> 00:08:31,360
Speaker 1: get to like the more specific consequences, let's talk about

146
00:08:31,440 --> 00:08:34,760
Speaker 1: like what that actually created from a markets structure perspective.

147
00:08:35,400 --> 00:08:39,240
Speaker 1: Homeowners become this very powerful political block. Their relative permanence

148
00:08:39,280 --> 00:08:43,440
Speaker 1: increased their propensity to vote. Uh, and they team up

149
00:08:43,440 --> 00:08:45,920
Speaker 1: with conservative interest to weaken the state. The idea that

150
00:08:45,920 --> 00:08:49,559
Speaker 1: everyone becomes a homeowner becomes gospel, and homeowner homes become

151
00:08:49,760 --> 00:08:52,320
Speaker 1: used as investments. But this was always sort of a

152
00:08:52,360 --> 00:08:55,720
Speaker 1: Ponzi scheme because you know, the you're protecting the investments

153
00:08:55,720 --> 00:08:58,520
Speaker 1: by putting up barriers to entry. Uh. So you know,

154
00:08:58,640 --> 00:09:01,640
Speaker 1: one generation buysing rich off of it, and then housing

155
00:09:01,679 --> 00:09:04,720
Speaker 1: prices get too expensive so that the next generation can't

156
00:09:04,720 --> 00:09:07,200
Speaker 1: buy in, or if they do, they're buying in a

157
00:09:07,280 --> 00:09:12,880
Speaker 1: much more vulnerable terms persons. Yeah, you know, they're higher

158
00:09:13,040 --> 00:09:17,720
Speaker 1: higher loaned values. The values themselves are arguably inflated. Um.

159
00:09:17,760 --> 00:09:21,319
Speaker 1: So all this leaves the rental market as a market

160
00:09:21,360 --> 00:09:27,199
Speaker 1: with essentially unlimited demand, a growing pool of um of

161
00:09:27,400 --> 00:09:31,800
Speaker 1: participants on on the demand side. Uh. And you know,

162
00:09:32,520 --> 00:09:35,400
Speaker 1: unlike other utility markets, which is basically what housing is,

163
00:09:35,600 --> 00:09:39,000
Speaker 1: it's vastly and wildly on regulator. So it would be

164
00:09:39,080 --> 00:09:42,120
Speaker 1: like you know, Enron in the in the early two

165
00:09:42,120 --> 00:09:44,199
Speaker 1: thousands and late nineties that was just going wild on

166
00:09:44,280 --> 00:09:47,560
Speaker 1: deregulated energy markets, except we've been doing it all over

167
00:09:47,600 --> 00:10:06,840
Speaker 1: the country for decades. Can I just ask a really

168
00:10:06,840 --> 00:10:09,959
Speaker 1: basic question, but like, if you're a landlord, how are

169
00:10:10,000 --> 00:10:13,120
Speaker 1: you making most of your money? Is it by getting

170
00:10:13,280 --> 00:10:16,040
Speaker 1: the monthly rent? Or is it by building up a

171
00:10:16,080 --> 00:10:19,400
Speaker 1: real estate portfolio and then selling it or flipping it

172
00:10:19,480 --> 00:10:21,280
Speaker 1: at some point in time? Like what is the mix?

173
00:10:21,520 --> 00:10:23,240
Speaker 1: And I know you made the point about the difference

174
00:10:23,280 --> 00:10:26,880
Speaker 1: between mom and pop landlords versus the big corporations. Can

175
00:10:26,920 --> 00:10:28,640
Speaker 1: you just talk a little bit more about the different

176
00:10:28,679 --> 00:10:32,440
Speaker 1: business models? Sure? So, Partly that depends on the business

177
00:10:32,440 --> 00:10:34,520
Speaker 1: model of the landlord, but also depends on the market.

178
00:10:34,520 --> 00:10:35,959
Speaker 1: So in New York City is much more of an

179
00:10:36,000 --> 00:10:39,760
Speaker 1: appreciation based market than a than a rent than a

180
00:10:39,840 --> 00:10:44,200
Speaker 1: yield market, Whereas you know someplace in you know, the

181
00:10:44,240 --> 00:10:46,760
Speaker 1: Sound Belt might be more yield focused than appreciation focus.

182
00:10:46,840 --> 00:10:49,320
Speaker 1: So in New York City. You typically make your money

183
00:10:50,160 --> 00:10:55,840
Speaker 1: selling or refinancing or by generating scale. Scale obviously helps

184
00:10:55,880 --> 00:11:02,000
Speaker 1: in every market, whereas uh, you know, in other less

185
00:11:02,440 --> 00:11:06,520
Speaker 1: core markets, the more of the return is in the yield.

186
00:11:06,760 --> 00:11:08,480
Speaker 1: And this is a good segue into sort of the

187
00:11:08,520 --> 00:11:11,680
Speaker 1: other dynamic that that produced this situation is that, you know,

188
00:11:11,720 --> 00:11:15,400
Speaker 1: we have this vast unregulated rental market and simultaneously we

189
00:11:15,480 --> 00:11:19,080
Speaker 1: have an institutionalization of the business a multifamily and this

190
00:11:19,160 --> 00:11:20,920
Speaker 1: is kind of a you know, this is a broader

191
00:11:20,960 --> 00:11:23,560
Speaker 1: economic trend. You know that happened with with corporations in

192
00:11:23,280 --> 00:11:26,280
Speaker 1: the latter half of the twentieth century, and even with

193
00:11:27,040 --> 00:11:30,280
Speaker 1: other sectors of real estate. So like twenty years ago

194
00:11:30,440 --> 00:11:33,280
Speaker 1: or thirty years ago, the self storage business was a

195
00:11:33,400 --> 00:11:35,640
Speaker 1: very mom and pop business, but now it's this usually

196
00:11:35,679 --> 00:11:38,319
Speaker 1: institutionalized business. So this has happened in a particular acute

197
00:11:38,360 --> 00:11:42,600
Speaker 1: way in multifamily because of just how big of a

198
00:11:42,640 --> 00:11:45,720
Speaker 1: market it is, how long standing of a business it is,

199
00:11:46,040 --> 00:11:49,600
Speaker 1: and how relatively homogeneous the product is. Well, I was

200
00:11:49,679 --> 00:11:52,280
Speaker 1: gonna say too, I mean, I know, like if there

201
00:11:52,400 --> 00:11:56,760
Speaker 1: is this inherent challenge of creating new units and everyone

202
00:11:56,800 --> 00:11:58,760
Speaker 1: and we talked about like the you know, the sort

203
00:11:58,760 --> 00:12:02,520
Speaker 1: of barrier is to enter. I have to imagine that

204
00:12:02,920 --> 00:12:06,280
Speaker 1: scale becomes a very big advantage in knowing how to

205
00:12:06,400 --> 00:12:11,080
Speaker 1: navigate these permitting certain like how do you do construction

206
00:12:11,240 --> 00:12:13,760
Speaker 1: in New York City? The entities that have done it

207
00:12:13,840 --> 00:12:15,679
Speaker 1: over and over and over again have to have a

208
00:12:15,720 --> 00:12:21,319
Speaker 1: pretty significant advantage over a smaller or less institutionalized I mean,

209
00:12:21,320 --> 00:12:24,320
Speaker 1: I guess there's a difference between developer and yeah, landlord,

210
00:12:24,360 --> 00:12:26,200
Speaker 1: but it just feels like, well, all of these things,

211
00:12:26,240 --> 00:12:29,200
Speaker 1: there must be quite quite a few advantages to scale

212
00:12:29,200 --> 00:12:31,160
Speaker 1: on this type of stuff. Yeah, I mean, there's definitely

213
00:12:31,320 --> 00:12:35,360
Speaker 1: a difference between landlords and developers. But I think to

214
00:12:35,520 --> 00:12:38,400
Speaker 1: your your broader point is correct, which is this has

215
00:12:38,400 --> 00:12:42,520
Speaker 1: been particularly enabled by by technology. This used to be

216
00:12:42,520 --> 00:12:47,640
Speaker 1: a very inefficient business, and the institutionalization has sucked all

217
00:12:47,679 --> 00:12:50,520
Speaker 1: of the inefficiency out of this business through you know,

218
00:12:51,559 --> 00:12:56,480
Speaker 1: technology that has been implemented to you know, price rents

219
00:12:56,480 --> 00:13:02,359
Speaker 1: more efficiently, the disaggregation of functions. So you know, historically, um,

220
00:13:02,360 --> 00:13:05,880
Speaker 1: you know, the apartment owners where you know, everyone's sort

221
00:13:05,880 --> 00:13:08,439
Speaker 1: of in the same company, and now all these different

222
00:13:08,520 --> 00:13:11,320
Speaker 1: roles have been distributed into other companies. They're specialists that

223
00:13:11,320 --> 00:13:15,079
Speaker 1: provide third party services. It's it's become a business where

224
00:13:15,080 --> 00:13:18,600
Speaker 1: everyone is getting their cut. Uh. And scale UM puts

225
00:13:18,600 --> 00:13:22,040
Speaker 1: you in the best position to um, you know, reap

226
00:13:22,120 --> 00:13:26,480
Speaker 1: the benefits of economies of scale. So your argument is that, um,

227
00:13:26,520 --> 00:13:29,000
Speaker 1: you know, a process beginning I guess in the nineteen

228
00:13:29,040 --> 00:13:35,040
Speaker 1: fifties of deregul deregulation combined with institutionalization of the rental

229
00:13:35,120 --> 00:13:40,360
Speaker 1: market starts to change the profit dynamics for landlords. Can

230
00:13:40,400 --> 00:13:42,760
Speaker 1: you talk a little bit more about exactly how that

231
00:13:42,840 --> 00:13:45,600
Speaker 1: happens and how it sort of develops up until UM,

232
00:13:45,720 --> 00:13:49,280
Speaker 1: I guess today it's really demographic driven. Uh. You know,

233
00:13:49,400 --> 00:13:52,240
Speaker 1: it's designed to serve UM. This you know, growing class

234
00:13:52,240 --> 00:13:56,800
Speaker 1: of homeowners, UM, A growing class of college graduates enters

235
00:13:56,840 --> 00:13:59,920
Speaker 1: the real estate business. UM. You know historically was you know,

236
00:14:00,600 --> 00:14:02,480
Speaker 1: a business that a lot of people without that much

237
00:14:02,559 --> 00:14:08,240
Speaker 1: education could get into. And they start applying modern business

238
00:14:08,320 --> 00:14:14,520
Speaker 1: processes to pricing units more effect efficiently, to operating the

239
00:14:14,600 --> 00:14:18,400
Speaker 1: buildings more efficiently, just picking it every possible part of

240
00:14:18,400 --> 00:14:21,200
Speaker 1: the business to extract a profit out of it. That

241
00:14:21,480 --> 00:14:24,960
Speaker 1: has served the industry very well, but it has not

242
00:14:25,040 --> 00:14:28,960
Speaker 1: served I arguably the greater public very well. And I

243
00:14:28,960 --> 00:14:32,280
Speaker 1: think that's sort of where these dynamics that these twin

244
00:14:32,360 --> 00:14:38,320
Speaker 1: dynamics of demographic change prompting policy and technology prompting institutionalization

245
00:14:38,600 --> 00:14:40,520
Speaker 1: are now going to flip back the other way. And

246
00:14:40,520 --> 00:14:42,320
Speaker 1: we're starting to see the beginnings of that. So I

247
00:14:42,360 --> 00:14:45,320
Speaker 1: want to obviously like talk about this flip and some

248
00:14:45,400 --> 00:14:48,040
Speaker 1: of the demographics and all that. But before you do,

249
00:14:48,120 --> 00:14:52,360
Speaker 1: can you just expand you made one point about disperse

250
00:14:53,160 --> 00:14:56,920
Speaker 1: property tax treatment that you said like put renters at

251
00:14:56,920 --> 00:14:59,600
Speaker 1: a disadvantage? Can you clarify, like what is in the

252
00:14:59,680 --> 00:15:04,560
Speaker 1: code that is so advantage or advantageous to landlords? Sure? So,

253
00:15:04,880 --> 00:15:10,200
Speaker 1: as a general matter, around the United States, homeowners are

254
00:15:10,280 --> 00:15:14,920
Speaker 1: viewed as the most important political block in any jurisdiction,

255
00:15:15,320 --> 00:15:19,680
Speaker 1: and their property taxes are kept low, and particularly the

256
00:15:19,920 --> 00:15:24,080
Speaker 1: increases in their property taxes. So municipalities really have very

257
00:15:24,160 --> 00:15:27,640
Speaker 1: few levers for generating revenue in this country, so they

258
00:15:27,680 --> 00:15:30,280
Speaker 1: typically they need someplace to make up the revenue. So

259
00:15:30,800 --> 00:15:33,920
Speaker 1: as a result, apartment buildings start taking on a larger

260
00:15:33,960 --> 00:15:36,240
Speaker 1: and larger share of the bird. This works different ways

261
00:15:36,360 --> 00:15:39,840
Speaker 1: in different jurisdictions, but in New York City, for instance,

262
00:15:41,280 --> 00:15:45,520
Speaker 1: buildings over eleven units make up and increasing share of

263
00:15:45,560 --> 00:15:52,040
Speaker 1: the revenue for taxes. This also applies to commercial properties,

264
00:15:52,240 --> 00:15:57,520
Speaker 1: whereas buildings of one to three units have artificial or

265
00:15:57,840 --> 00:16:00,640
Speaker 1: caps on the amount that their assessment can grow every year,

266
00:16:01,280 --> 00:16:05,080
Speaker 1: and even buildings of four to eleven units excuse me,

267
00:16:05,080 --> 00:16:07,840
Speaker 1: four to ten units also have caps, although albeit not

268
00:16:07,840 --> 00:16:09,760
Speaker 1: as good as the one to three families, which is

269
00:16:09,800 --> 00:16:12,880
Speaker 1: sort of a reflection of the same political dynamic in

270
00:16:12,920 --> 00:16:17,160
Speaker 1: that the people that at least policymakers believed own these

271
00:16:17,200 --> 00:16:19,920
Speaker 1: small apartment buildings are closer to a voter. It's sort

272
00:16:19,920 --> 00:16:23,800
Speaker 1: of your your yeoman, your landlord, not the big bad landlord.

273
00:16:24,080 --> 00:16:28,840
Speaker 1: So these groups have been given preferential property tax treatment

274
00:16:29,120 --> 00:16:35,360
Speaker 1: and the apartment buildings, and in turn their residents have

275
00:16:35,520 --> 00:16:42,080
Speaker 1: been getting increasingly unfavorable property tex treatment. So the landlord business,

276
00:16:42,160 --> 00:16:45,040
Speaker 1: what exactly are the risks that landlords are taking on

277
00:16:45,120 --> 00:16:47,520
Speaker 1: and how should they be compensated for that? Because when

278
00:16:47,520 --> 00:16:50,680
Speaker 1: I think of a landlord, it's like, Okay, maybe you

279
00:16:50,760 --> 00:16:53,600
Speaker 1: have a bad tenant who doesn't pay their rent on time.

280
00:16:53,760 --> 00:16:55,920
Speaker 1: That's a little bit of a risk. But in general,

281
00:16:56,400 --> 00:16:58,400
Speaker 1: it feels like there are a lot of protections around

282
00:16:58,440 --> 00:17:00,720
Speaker 1: the business, and it also feels like there's a tendency

283
00:17:00,720 --> 00:17:03,720
Speaker 1: for real estate prices to mostly go up, especially in

284
00:17:03,760 --> 00:17:07,720
Speaker 1: New York, right, So UM, dealing with you know, problematic

285
00:17:07,720 --> 00:17:12,680
Speaker 1: tenants UM. And also you know, operational increases. So let's

286
00:17:12,680 --> 00:17:16,320
Speaker 1: talk about the tenant side. The tenant side that varies

287
00:17:16,440 --> 00:17:21,119
Speaker 1: widely um from landlord to landlord. So you know, our

288
00:17:21,400 --> 00:17:25,359
Speaker 1: our tenants generally speaking, are pretty wealthy. UM. I have

289
00:17:25,560 --> 00:17:29,600
Speaker 1: never had to evict someone um and uh, you know

290
00:17:29,680 --> 00:17:33,800
Speaker 1: we we rarely have issues, UM, whereas there's lots of

291
00:17:33,880 --> 00:17:38,639
Speaker 1: landlords that have uh you know, tenants that are have

292
00:17:38,680 --> 00:17:42,840
Speaker 1: a more marginalized UM, so its economic status uh and

293
00:17:43,480 --> 00:17:47,399
Speaker 1: UM that's trickier. However, the demand for that is is

294
00:17:47,800 --> 00:17:51,440
Speaker 1: UM very high, and the yields that those properties trade

295
00:17:51,480 --> 00:17:54,800
Speaker 1: for are generally higher, so their landlords are are compensated

296
00:17:54,840 --> 00:17:58,359
Speaker 1: for that risk. Furthermore, UM, with the institution and the

297
00:17:58,440 --> 00:18:02,960
Speaker 1: growth of Section eight rental subsidies, a lot of these UM,

298
00:18:03,280 --> 00:18:06,359
Speaker 1: the rents being marginal being paid by marginal tenants are

299
00:18:06,359 --> 00:18:09,040
Speaker 1: effectively underwritten by the government. So you know, how much

300
00:18:09,119 --> 00:18:10,920
Speaker 1: risk is a landlord really taking on a Section eight

301
00:18:10,960 --> 00:18:14,720
Speaker 1: building UM. From from a tendency perspective, from the respective

302
00:18:14,800 --> 00:18:18,320
Speaker 1: of operating expenses US as we talked about property taxes.

303
00:18:18,440 --> 00:18:21,760
Speaker 1: UM you know, are are being constrained in some cases,

304
00:18:21,800 --> 00:18:25,119
Speaker 1: but in other cases they are not. Uh, And that's

305
00:18:25,200 --> 00:18:27,439
Speaker 1: you know, where operational efficiency comes in. So you know,

306
00:18:27,600 --> 00:18:33,760
Speaker 1: operational costs are the most important costs for landlords to

307
00:18:34,440 --> 00:18:38,000
Speaker 1: UM control, and in some ways they are in their

308
00:18:38,320 --> 00:18:41,480
Speaker 1: least amount of control. So at least with finance and costs,

309
00:18:41,560 --> 00:18:43,760
Speaker 1: you have some decision over when you make that when

310
00:18:43,760 --> 00:18:48,760
Speaker 1: you incur that costs. But for you know, fuel maintenance,

311
00:18:48,800 --> 00:18:50,760
Speaker 1: like you really don't, I mean maintenance to a lesser too,

312
00:18:50,880 --> 00:18:53,040
Speaker 1: a bit fuel and another more recurring costs, you don't

313
00:18:53,080 --> 00:18:54,800
Speaker 1: have as much control. I was just so I want

314
00:18:54,840 --> 00:18:58,600
Speaker 1: to ask about financing because of course, you know, we

315
00:18:58,720 --> 00:19:00,760
Speaker 1: sort of talked about in the intro, lots of things

316
00:19:00,800 --> 00:19:03,080
Speaker 1: are shifting. And one thing that seems to be shifting

317
00:19:03,200 --> 00:19:08,760
Speaker 1: is like maybe this forty year steady decline in interest rates.

318
00:19:08,920 --> 00:19:11,679
Speaker 1: Can you talk a little bit about from your experience,

319
00:19:11,800 --> 00:19:16,920
Speaker 1: like your mix of like equity borrowing, etc. And if

320
00:19:16,920 --> 00:19:20,920
Speaker 1: there is you know, there's like sustain reversal, what does

321
00:19:20,920 --> 00:19:24,159
Speaker 1: that do to your economics? Well, it doesn't do that

322
00:19:24,280 --> 00:19:26,399
Speaker 1: much or won't do that much to buy economics because

323
00:19:26,560 --> 00:19:30,119
Speaker 1: I'm gonna get out of this business, but you're gonna

324
00:19:30,119 --> 00:19:32,400
Speaker 1: stop being a landlord altogether. I'm gonna stop that bad.

325
00:19:33,040 --> 00:19:35,040
Speaker 1: It's not so much it's bad. We can get into

326
00:19:35,280 --> 00:19:38,119
Speaker 1: the reasons why further. But like I think, going forward,

327
00:19:38,680 --> 00:19:42,359
Speaker 1: certain types of players in this business are gonna make money,

328
00:19:42,440 --> 00:19:45,080
Speaker 1: are going to make sort of above average returns and

329
00:19:45,640 --> 00:19:49,920
Speaker 1: the rest will make you know, utility or bond like returns.

330
00:19:50,000 --> 00:19:52,360
Speaker 1: And if I'm going to buy a bond, I'd rather

331
00:19:52,400 --> 00:19:56,720
Speaker 1: buy tips. And if I'm gonna invest, you know, I'd

332
00:19:56,800 --> 00:19:59,240
Speaker 1: rather invest in real estate that is less management intensive

333
00:19:59,440 --> 00:20:03,119
Speaker 1: than residential. Well, okay, just before we get because this

334
00:20:03,200 --> 00:20:04,800
Speaker 1: is the heart of the question why you want to

335
00:20:04,800 --> 00:20:08,480
Speaker 1: get out, but before we get today. Yeah, were you staying? Yeah?

336
00:20:08,520 --> 00:20:11,800
Speaker 1: And can you talk so I'm financing I think you know,

337
00:20:11,880 --> 00:20:15,040
Speaker 1: as you pointed out, we've been coming out of this

338
00:20:15,160 --> 00:20:17,080
Speaker 1: you know, forty year period where interesting it's been very

339
00:20:17,080 --> 00:20:19,639
Speaker 1: low UM and a lot of business models have been

340
00:20:19,680 --> 00:20:24,640
Speaker 1: built on UM, you know, very cheap capital UH and UM.

341
00:20:25,359 --> 00:20:29,520
Speaker 1: As a result, yields have become very low in certain markets,

342
00:20:29,840 --> 00:20:33,520
Speaker 1: really most markets, UM. And I think that's a particular

343
00:20:33,800 --> 00:20:41,240
Speaker 1: challenge in markets that UM we're depending on one of

344
00:20:41,280 --> 00:20:48,919
Speaker 1: two things, regulatory arbitrage and appreciation. So in you know,

345
00:20:48,920 --> 00:20:52,320
Speaker 1: we talked about the difference between markets in which the

346
00:20:52,359 --> 00:20:55,280
Speaker 1: main component of the return is yield versus the versus appreciation.

347
00:20:55,600 --> 00:20:58,680
Speaker 1: The yield markets they're going to not be as challenged

348
00:20:58,760 --> 00:21:01,320
Speaker 1: from a sort of you know, being able to sell

349
00:21:01,359 --> 00:21:04,400
Speaker 1: for the right price perspective. Certainly some people will, but

350
00:21:05,080 --> 00:21:07,239
Speaker 1: a market like New York City that's a little more

351
00:21:07,320 --> 00:21:10,439
Speaker 1: challenging because if you buy at a five percent return,

352
00:21:11,320 --> 00:21:13,360
Speaker 1: and you financed that at a three and a half

353
00:21:13,400 --> 00:21:15,679
Speaker 1: percent return, and you're assuming that you're gonna be able

354
00:21:15,720 --> 00:21:17,240
Speaker 1: to sell that at a four and a half or

355
00:21:17,240 --> 00:21:19,800
Speaker 1: you were when you bought it four years ago, that's

356
00:21:19,840 --> 00:21:23,119
Speaker 1: not a realistic assumption anymore. So, you know, depending on

357
00:21:23,160 --> 00:21:26,080
Speaker 1: your leverage level, you have a different set of options

358
00:21:26,400 --> 00:21:32,160
Speaker 1: to either continue on or extricate yourself in that suittion.

359
00:21:49,040 --> 00:21:51,000
Speaker 1: Can you talk a little bit more about what you

360
00:21:51,040 --> 00:21:54,879
Speaker 1: see changing now other than the higher interest rates, Like

361
00:21:54,920 --> 00:21:58,760
Speaker 1: what is the mix that is going to pressure the

362
00:21:58,840 --> 00:22:01,800
Speaker 1: rental business? Sure, so you know, we have this the

363
00:22:01,800 --> 00:22:04,840
Speaker 1: demographic decisions, a demographic driven policy decisions that were made

364
00:22:05,000 --> 00:22:08,760
Speaker 1: in the mid to late twentieth century are now coming

365
00:22:08,800 --> 00:22:11,600
Speaker 1: home to roost. You have this growing class or renters um.

366
00:22:11,960 --> 00:22:15,400
Speaker 1: You know, you have increasing rent Burton's evictions or destroying

367
00:22:15,440 --> 00:22:19,320
Speaker 1: lives just like foreclosures are. And I think most crucially

368
00:22:19,640 --> 00:22:23,760
Speaker 1: this crisis is now including people from that very powerful

369
00:22:23,800 --> 00:22:26,199
Speaker 1: political block in so far as you know, people of

370
00:22:26,240 --> 00:22:29,880
Speaker 1: my generation, in our generation really who would have been

371
00:22:29,880 --> 00:22:33,040
Speaker 1: homeowners thirty years ago, are now not going to be homeowners,

372
00:22:33,080 --> 00:22:34,560
Speaker 1: or if they are, they're going to pay much more

373
00:22:34,640 --> 00:22:37,400
Speaker 1: for it and by become homeowners much later in life

374
00:22:37,400 --> 00:22:41,119
Speaker 1: and view it more as a as a housing cost

375
00:22:41,359 --> 00:22:44,760
Speaker 1: stability vehicle. You know, there's this there's this joke about

376
00:22:45,040 --> 00:22:48,320
Speaker 1: the thirty year mortgage being a homeowner rent control, and

377
00:22:48,359 --> 00:22:50,480
Speaker 1: I think that sort of logic is now seeping into

378
00:22:50,480 --> 00:22:53,199
Speaker 1: the homeownership market and it's becoming less of a um,

379
00:22:53,600 --> 00:22:56,560
Speaker 1: slowly becoming a less of a gambling market. So you

380
00:22:56,560 --> 00:23:01,160
Speaker 1: now have this big demographic of people that are concerned

381
00:23:01,200 --> 00:23:05,399
Speaker 1: with rental costs. So this seems really key, which is

382
00:23:05,440 --> 00:23:09,840
Speaker 1: that politicians have this idea of like what a good voter,

383
00:23:10,160 --> 00:23:14,280
Speaker 1: what a good citizen is like, and for years that

384
00:23:14,359 --> 00:23:18,080
Speaker 1: person was a homeowner, right, And now the basic idea

385
00:23:18,240 --> 00:23:23,560
Speaker 1: is that there is becoming a meaningful, voting, politically influential

386
00:23:23,600 --> 00:23:27,760
Speaker 1: block that is much more likely today to be a

387
00:23:27,760 --> 00:23:30,960
Speaker 1: tenant than a homeowner than they were thirty years ago.

388
00:23:31,400 --> 00:23:34,480
Speaker 1: And so the political wins are over timed. It's like, oh,

389
00:23:34,520 --> 00:23:38,000
Speaker 1: the voters these like day's ideal voter is not necessarily

390
00:23:38,040 --> 00:23:41,239
Speaker 1: a homeowner, right And and it's also, um, you know

391
00:23:41,240 --> 00:23:44,280
Speaker 1: that that sort of new rent or block is teaming

392
00:23:44,359 --> 00:23:46,760
Speaker 1: up with the old renter block, because it's not like

393
00:23:46,760 --> 00:23:49,320
Speaker 1: we didn't have renters and they weren't organized before. It's

394
00:23:49,359 --> 00:23:51,840
Speaker 1: just that, you know, politicians could sort of ignore them

395
00:23:51,880 --> 00:23:55,840
Speaker 1: because they are because they're of a marginalized background, or

396
00:23:56,000 --> 00:23:59,000
Speaker 1: because they are perceived not vote as much, or whatever

397
00:23:59,040 --> 00:24:01,760
Speaker 1: reasons they come up with. So this is manifesting itself

398
00:24:01,840 --> 00:24:06,800
Speaker 1: in two and a half different ways. One is the

399
00:24:06,840 --> 00:24:09,040
Speaker 1: yendi movement, which for those are who are not familiar

400
00:24:09,040 --> 00:24:11,399
Speaker 1: as the Yes in my Backyard movement, which advocates for

401
00:24:11,440 --> 00:24:18,040
Speaker 1: building more housing, particularly in high demand areas. Arguably it's

402
00:24:18,040 --> 00:24:21,600
Speaker 1: a successor movement to the fair housing movement from from

403
00:24:21,720 --> 00:24:25,480
Speaker 1: late twentieth century. I was one of the founders of

404
00:24:25,480 --> 00:24:27,120
Speaker 1: the biggest group that does is in New York City

405
00:24:27,119 --> 00:24:32,760
Speaker 1: called Open New York, and in parallel, we have a

406
00:24:32,840 --> 00:24:37,280
Speaker 1: resurgence of the rent regulation movement and sort of brought

407
00:24:37,359 --> 00:24:40,359
Speaker 1: tenant protection movement brought broadly. And I think it's important

408
00:24:40,359 --> 00:24:44,160
Speaker 1: to keep in mind that like America is pretty unique

409
00:24:44,320 --> 00:24:49,080
Speaker 1: in being a developed country and having vastly unregulated rental market,

410
00:24:49,440 --> 00:24:52,680
Speaker 1: like we have, you know, an unusually low home ownership

411
00:24:52,760 --> 00:24:55,720
Speaker 1: rate contrary to what people think, but unlike countries with

412
00:24:55,720 --> 00:24:58,840
Speaker 1: similarly low homeownership rates, we typically don't have rent controls.

413
00:24:58,840 --> 00:25:02,679
Speaker 1: So like Germany has comparably low homeownership rates, they have

414
00:25:02,720 --> 00:25:06,800
Speaker 1: rent controls. France as comparably low homeownership rates, they just

415
00:25:07,320 --> 00:25:10,200
Speaker 1: parishes re institute of them. So um, you know, we've

416
00:25:10,200 --> 00:25:14,000
Speaker 1: seen these resurgence of um, you know, rent regulation and

417
00:25:14,080 --> 00:25:16,800
Speaker 1: even not just in places like New York and California,

418
00:25:16,880 --> 00:25:21,000
Speaker 1: but um in Minnesota, in even in Orlando they had

419
00:25:21,000 --> 00:25:24,600
Speaker 1: something on the ballot this last year. Uh and UM.

420
00:25:24,800 --> 00:25:29,600
Speaker 1: I think this is a good segue for both of

421
00:25:29,600 --> 00:25:35,560
Speaker 1: these into how the consequences of institutionalization, because institutionalization has

422
00:25:35,600 --> 00:25:39,720
Speaker 1: created um, real estate entities that are much better targets

423
00:25:39,720 --> 00:25:42,480
Speaker 1: of organizing from political perspectives, you know, they might not

424
00:25:42,560 --> 00:25:45,280
Speaker 1: be you know, Blackstone might not be as vulnerable as

425
00:25:45,440 --> 00:25:48,280
Speaker 1: your mom pop landlord for organizing individual building, but in

426
00:25:48,359 --> 00:25:51,360
Speaker 1: terms of like getting policy passed and creating a political coalition,

427
00:25:51,400 --> 00:25:54,320
Speaker 1: it's much more compelling. This is interesting, you know, like

428
00:25:54,560 --> 00:25:56,880
Speaker 1: you hear like labor people talk about like, actually, it's

429
00:25:56,920 --> 00:25:59,680
Speaker 1: kind of good that Amazon is becoming a huge employer,

430
00:25:59,720 --> 00:26:02,880
Speaker 1: because if you can get unions into Amazon warehouse, you've

431
00:26:03,000 --> 00:26:06,800
Speaker 1: radically like change the American labor market, or at least

432
00:26:06,800 --> 00:26:10,560
Speaker 1: you have one identifiable identity to target, right. And so

433
00:26:10,600 --> 00:26:14,040
Speaker 1: then if you have these big institutional landlords, then like

434
00:26:14,119 --> 00:26:16,720
Speaker 1: you have a right. I hadn't thought about that, which

435
00:26:16,720 --> 00:26:18,440
Speaker 1: if you have a thing to organize. Again, it's also

436
00:26:18,520 --> 00:26:22,240
Speaker 1: already sort of happening because you hear so much nowadays

437
00:26:22,280 --> 00:26:26,639
Speaker 1: about institutional investors buying up single family houses for rent

438
00:26:26,760 --> 00:26:29,760
Speaker 1: or for flipping purposes. Right, And it's not like single

439
00:26:29,800 --> 00:26:32,960
Speaker 1: family landlords didn't exist before, but now we're talking about

440
00:26:33,000 --> 00:26:38,840
Speaker 1: it because it's Wall Street. Yeah, and the third I'll

441
00:26:38,840 --> 00:26:40,560
Speaker 1: get into the third one in a moment. But this

442
00:26:40,640 --> 00:26:47,359
Speaker 1: is also a function of technology, because the same similar

443
00:26:47,400 --> 00:26:50,840
Speaker 1: technologies that made it easier for institutions to be created

444
00:26:50,880 --> 00:26:55,400
Speaker 1: and organize themselves are now making it easier to organize

445
00:26:55,440 --> 00:27:00,680
Speaker 1: among tenants. And historically, if you if a bunch of

446
00:27:00,680 --> 00:27:02,760
Speaker 1: people in different buildings all over the city had under

447
00:27:02,800 --> 00:27:05,600
Speaker 1: different or we're living under the same landlord, how are

448
00:27:05,600 --> 00:27:07,639
Speaker 1: they going to find each other? But now you know,

449
00:27:07,680 --> 00:27:11,480
Speaker 1: there's all this public data, there's the you know, the Internet,

450
00:27:12,200 --> 00:27:14,639
Speaker 1: there's all different ways for people to get together and

451
00:27:14,680 --> 00:27:17,080
Speaker 1: build coalitions that didn't exist before. Can I ask you,

452
00:27:17,080 --> 00:27:20,440
Speaker 1: you know, you mentioned the MBA movement. We talked about

453
00:27:20,480 --> 00:27:22,680
Speaker 1: some of this on a recent episode. And you're a

454
00:27:22,800 --> 00:27:24,639
Speaker 1: part of an organization, you know, I see all the

455
00:27:24,680 --> 00:27:27,919
Speaker 1: tweets and the stuff. Can you talk specifically about like

456
00:27:28,160 --> 00:27:31,600
Speaker 1: how it's moving the dial, like beyond the tweets, that

457
00:27:31,680 --> 00:27:35,240
Speaker 1: it actually is affecting the economics of the business. Sure,

458
00:27:36,600 --> 00:27:39,239
Speaker 1: I'll first talk about how it's affecting the politics. Like

459
00:27:39,359 --> 00:27:43,240
Speaker 1: in California, you know, they've passed a bunch of huge laws.

460
00:27:43,359 --> 00:27:46,639
Speaker 1: You know, they've banned single family zoning, They've up zoned

461
00:27:46,680 --> 00:27:49,639
Speaker 1: you know, commercial quarters all over the state. In New

462
00:27:49,720 --> 00:27:52,320
Speaker 1: York State, the governor recently came out with prosals to

463
00:27:52,400 --> 00:27:54,639
Speaker 1: build eight hundred thousand new homes over the next decade,

464
00:27:54,640 --> 00:27:57,359
Speaker 1: which is over double the amount that was built the

465
00:27:57,440 --> 00:28:01,679
Speaker 1: last decade, and in terms of the economics of the business,

466
00:28:02,080 --> 00:28:08,920
Speaker 1: I think what it's mainly changed so far is where

467
00:28:09,720 --> 00:28:13,800
Speaker 1: developers are willing to take chances on trying to rezone.

468
00:28:14,640 --> 00:28:17,800
Speaker 1: It hasn't so much changed the economics of the um

469
00:28:18,200 --> 00:28:20,480
Speaker 1: of your sort of your as of right typical day

470
00:28:20,480 --> 00:28:23,520
Speaker 1: to day development, because there hasn't you know, the Indian

471
00:28:23,640 --> 00:28:25,720
Speaker 1: was very young and hasn't been that much built yet.

472
00:28:26,000 --> 00:28:28,560
Speaker 1: But now a developer might be more likely to take

473
00:28:28,600 --> 00:28:32,080
Speaker 1: a take a chance on a on a rezoning in

474
00:28:32,080 --> 00:28:34,280
Speaker 1: a rich neighborhood which actually is going to be much

475
00:28:34,320 --> 00:28:37,000
Speaker 1: more profitable that for them, but would have than than

476
00:28:37,000 --> 00:28:39,560
Speaker 1: doing a poor neighborhood, but was seen as very politically

477
00:28:39,640 --> 00:28:44,120
Speaker 1: challenging because like Open New York got the got Soho

478
00:28:44,160 --> 00:28:46,560
Speaker 1: and NoHo rezoned for housing which people thought never would have.

479
00:28:46,760 --> 00:28:51,360
Speaker 1: So it's it's mainly changing the sort of political environment

480
00:28:51,440 --> 00:28:55,840
Speaker 1: for participants in the real estate industry that are involved

481
00:28:55,880 --> 00:29:01,560
Speaker 1: in development, and the actual economics of being a landlord

482
00:29:01,840 --> 00:29:06,640
Speaker 1: haven't changed in a direct way. It's been more disparate.

483
00:29:06,680 --> 00:29:09,000
Speaker 1: Like you saw on the Journal recently came up with

484
00:29:09,000 --> 00:29:11,280
Speaker 1: this big story that everyone was reading about how rents

485
00:29:11,280 --> 00:29:14,640
Speaker 1: have fallen over the country because supplies, someone's supplies coming

486
00:29:14,640 --> 00:29:17,000
Speaker 1: inlin You know, the NBA movement can take some credit

487
00:29:17,040 --> 00:29:20,120
Speaker 1: for that, but you know it's also just for these

488
00:29:20,160 --> 00:29:22,840
Speaker 1: developers are responding to market signals that you know, there's

489
00:29:22,840 --> 00:29:25,840
Speaker 1: not enough supply. It feels to me like there's still

490
00:29:25,920 --> 00:29:30,440
Speaker 1: a lot of institutional capital flowing into this business. I mean,

491
00:29:30,520 --> 00:29:34,200
Speaker 1: certainly we've talked about, you know, the big players who

492
00:29:34,200 --> 00:29:36,640
Speaker 1: are snapping up single family homes, and that's been a

493
00:29:36,640 --> 00:29:38,960
Speaker 1: major talking point for a couple of years now. But

494
00:29:39,120 --> 00:29:43,320
Speaker 1: why is it Why does the industry presumably still see

495
00:29:43,360 --> 00:29:47,160
Speaker 1: the rental market as a profitable one, Like there still

496
00:29:47,200 --> 00:29:49,800
Speaker 1: seems to be a lot of interest and money flowing

497
00:29:49,880 --> 00:29:53,000
Speaker 1: into the space, and presumably it's coming in at you know,

498
00:29:53,320 --> 00:29:56,000
Speaker 1: the type of yields and values that we've seen in

499
00:29:56,040 --> 00:30:01,960
Speaker 1: previous decades. I think the industry sees the industry, excuse me,

500
00:30:02,040 --> 00:30:05,960
Speaker 1: the multi family market for as a profitable opportunity for

501
00:30:06,080 --> 00:30:09,400
Speaker 1: all the reasons we've been talking about. The demand is insatiable,

502
00:30:10,360 --> 00:30:13,560
Speaker 1: there are controls on how much supply can be added,

503
00:30:13,880 --> 00:30:18,440
Speaker 1: and it's a very capital intensive business, so it's a

504
00:30:18,440 --> 00:30:21,400
Speaker 1: good way to deploy capital. I'm not suggesting that there's

505
00:30:21,440 --> 00:30:24,200
Speaker 1: going to be some sort of crash. In fact, I

506
00:30:24,200 --> 00:30:29,800
Speaker 1: think institutionalization will continue apace because institutions have a lower

507
00:30:29,800 --> 00:30:32,240
Speaker 1: cost of capital than your mom and pops, and they

508
00:30:32,280 --> 00:30:36,320
Speaker 1: have the ex economies of scale and ability to execute

509
00:30:36,560 --> 00:30:39,520
Speaker 1: so that they can make money in this environment. And

510
00:30:39,560 --> 00:30:42,760
Speaker 1: I are in this sort of new environment that I'm positing,

511
00:30:43,120 --> 00:30:47,360
Speaker 1: and they are one of groups and I think just

512
00:30:47,560 --> 00:30:51,080
Speaker 1: representative of the big group more broadly that's going to

513
00:30:51,200 --> 00:30:52,960
Speaker 1: make money in this environment, which is that people that

514
00:30:52,960 --> 00:30:56,120
Speaker 1: can actually add value. So institutions are adding value from

515
00:30:56,200 --> 00:31:00,560
Speaker 1: scale operational effic industry developers are adding value from actually

516
00:31:00,560 --> 00:31:03,560
Speaker 1: producing housing. What I'm the people that I think are

517
00:31:03,560 --> 00:31:07,200
Speaker 1: going to be the losers in this scenario, or relative losers,

518
00:31:07,280 --> 00:31:10,400
Speaker 1: are landlords, um you know, of which there are many,

519
00:31:10,880 --> 00:31:14,360
Speaker 1: uh that are really have really just been riding rents

520
00:31:14,520 --> 00:31:19,000
Speaker 1: and not really like the purest rentiers in the market.

521
00:31:19,440 --> 00:31:23,080
Speaker 1: Can you talk about the other prong when you see

522
00:31:23,120 --> 00:31:26,440
Speaker 1: the return of sort of like tenants rights, whether what

523
00:31:26,640 --> 00:31:29,560
Speaker 1: is it rent control? Is it? Oh yeah, fiction restrictors?

524
00:31:29,600 --> 00:31:31,760
Speaker 1: Like what does that look like? You're twenty twenty three?

525
00:31:31,840 --> 00:31:34,000
Speaker 1: Can I tack onto that? Which is you mentioned the

526
00:31:34,040 --> 00:31:35,840
Speaker 1: tax Code, and of course there are a lot of

527
00:31:35,880 --> 00:31:40,080
Speaker 1: tax tax benefits that are meant to incentivize home ownership.

528
00:31:40,160 --> 00:31:42,120
Speaker 1: And I've often this might be a weird question, but

529
00:31:42,160 --> 00:31:45,959
Speaker 1: I've often wondered, like, why don't renters get some tax breaks?

530
00:31:46,040 --> 00:31:48,440
Speaker 1: You know, it's not really optional to pay your rent

531
00:31:48,720 --> 00:31:53,640
Speaker 1: um anyway. No, I completely agree, Tracy. And you know,

532
00:31:53,640 --> 00:31:56,680
Speaker 1: the biggest, the biggest expenditure of the federal government on

533
00:31:56,800 --> 00:31:59,640
Speaker 1: housing is the homeowner's interest induction or a mortgage. And

534
00:32:01,440 --> 00:32:05,320
Speaker 1: you know, there's various ways that that could be replicated, um,

535
00:32:05,520 --> 00:32:07,680
Speaker 1: because I doubt it's going to be paired back uh

536
00:32:08,160 --> 00:32:10,760
Speaker 1: UM for renters. It could be universal Section eight, it

537
00:32:10,800 --> 00:32:13,040
Speaker 1: could be some sort of renters task credit. I don't know,

538
00:32:13,080 --> 00:32:16,360
Speaker 1: but I think you know, as as this um demographic

539
00:32:16,760 --> 00:32:22,320
Speaker 1: shift portends political coalitions and change, UM, that will that's

540
00:32:22,360 --> 00:32:26,040
Speaker 1: certainly on the menu of things. Just like Joe mentioned,

541
00:32:26,640 --> 00:32:31,480
Speaker 1: what happens in where what order is going to vary

542
00:32:31,560 --> 00:32:35,800
Speaker 1: widely based on the state. So UM in New York State,

543
00:32:35,880 --> 00:32:40,040
Speaker 1: the big push right now is for good cause e fiction,

544
00:32:40,240 --> 00:32:44,160
Speaker 1: which is sort of a very light touch rent regulation

545
00:32:44,840 --> 00:32:48,400
Speaker 1: that past in California in twenty eighteen, past in Oregon,

546
00:32:48,920 --> 00:32:52,040
Speaker 1: UM they have it in in DC, a couple other

547
00:32:52,080 --> 00:32:55,160
Speaker 1: places Oitherhood of New Jersey since the nineteen seventies. UM

548
00:32:55,440 --> 00:32:59,080
Speaker 1: And Uh that so I think that sort of thing

549
00:32:59,080 --> 00:33:03,360
Speaker 1: is good. Good cause eviction is basically defense in an

550
00:33:03,400 --> 00:33:09,840
Speaker 1: eviction case that if a landlord, UM, if a tenant

551
00:33:09,880 --> 00:33:13,320
Speaker 1: de faults on the lease A and the landlord has

552
00:33:13,400 --> 00:33:16,480
Speaker 1: raised their rent by this has defined differently in different

553
00:33:16,480 --> 00:33:20,760
Speaker 1: places an unconscionable amount, the tenant can use that as

554
00:33:20,800 --> 00:33:23,640
Speaker 1: a defense for not being a victim. UM. And this

555
00:33:23,720 --> 00:33:29,520
Speaker 1: is um you know, particularly valuable theoretically in instances in

556
00:33:29,560 --> 00:33:33,640
Speaker 1: which um, A, let's say the conditions in the building

557
00:33:33,680 --> 00:33:38,360
Speaker 1: are really bad tenant complaints. Uh, and then the landlords,

558
00:33:38,680 --> 00:33:40,000
Speaker 1: you know, I'm just not going to re release or

559
00:33:40,040 --> 00:33:41,640
Speaker 1: I'm going to give you a huge round increase. So

560
00:33:41,640 --> 00:33:46,520
Speaker 1: that right. So, UM, that sort of soft rent regulationship

561
00:33:46,680 --> 00:33:50,640
Speaker 1: I think is going to become more prevalent. UM. You know,

562
00:33:50,720 --> 00:33:54,000
Speaker 1: the Supreme Court could certainly, um, you know, change some

563
00:33:54,080 --> 00:33:55,760
Speaker 1: of this, but I think in the main there's different

564
00:33:55,760 --> 00:34:01,280
Speaker 1: ways that many different ways that tenants rights can be increased,

565
00:34:01,480 --> 00:34:05,200
Speaker 1: whether it's some form of rank control to UM right

566
00:34:05,280 --> 00:34:10,880
Speaker 1: to counsel, to universal section night UM or or vouchers. Um.

567
00:34:10,960 --> 00:34:14,560
Speaker 1: And the point is that there's a growing political coalition

568
00:34:14,600 --> 00:34:17,640
Speaker 1: to agitate for these measures, whatever they may be in

569
00:34:18,320 --> 00:34:23,239
Speaker 1: a given political environment. So if you're no longer a landlord, UM, well,

570
00:34:23,280 --> 00:34:26,240
Speaker 1: first of all, how how serious are you about that statement?

571
00:34:26,280 --> 00:34:29,720
Speaker 1: And then secondly, what do you do instead? So, um,

572
00:34:29,880 --> 00:34:31,920
Speaker 1: I am still landlords? Is not going to be a

573
00:34:31,920 --> 00:34:34,239
Speaker 1: fire sale, and you know I will always be a

574
00:34:34,320 --> 00:34:37,880
Speaker 1: landlord because we're still commercial landlords. But um, you know

575
00:34:38,200 --> 00:34:41,000
Speaker 1: it's going to be an orderly liquidation because you know,

576
00:34:41,000 --> 00:34:43,000
Speaker 1: I don't. This is really a secular shift. It's not

577
00:34:43,080 --> 00:34:45,480
Speaker 1: It's not going to happen overnight. And plenty of people

578
00:34:45,520 --> 00:34:47,880
Speaker 1: disagree with me. Um, so they're they're walking to buy

579
00:34:48,000 --> 00:34:53,239
Speaker 1: my properties, I think inadvertently, like this episode is just

580
00:34:54,080 --> 00:34:57,000
Speaker 1: Ben you know he has properties for still. But I

581
00:34:57,000 --> 00:34:59,640
Speaker 1: think from a brokerage perspective, you know, I'll continue to

582
00:34:59,640 --> 00:35:02,479
Speaker 1: work with um. You know, players that I think are

583
00:35:03,120 --> 00:35:04,680
Speaker 1: either you know, want to get out as a result

584
00:35:04,680 --> 00:35:07,279
Speaker 1: of this dynamic, or institutions that you know, I think

585
00:35:07,280 --> 00:35:10,480
Speaker 1: will benefit or developers. But what I'm most interested in,

586
00:35:10,560 --> 00:35:13,920
Speaker 1: and I'm working on a lot right now, is trying

587
00:35:13,920 --> 00:35:17,799
Speaker 1: to figure out ways to bet on this dynamic UM

588
00:35:18,000 --> 00:35:22,279
Speaker 1: and short Essentially shorting the real estate business generally and

589
00:35:22,360 --> 00:35:26,840
Speaker 1: apartments in particular, is historically been very challenging because you know,

590
00:35:26,880 --> 00:35:29,520
Speaker 1: maybe you can short read stock, but like it, it's

591
00:35:29,520 --> 00:35:32,640
Speaker 1: not a it's not a liquid of a market. And um,

592
00:35:32,719 --> 00:35:35,840
Speaker 1: we're working on what we think are very creative ways

593
00:35:35,880 --> 00:35:38,440
Speaker 1: to um to bet on this dynamic. Well, let me

594
00:35:38,440 --> 00:35:40,560
Speaker 1: ask you. You know, you said, Okay, you're not really

595
00:35:40,880 --> 00:35:44,560
Speaker 1: necessarily expecting a crash. But on the other hand, like

596
00:35:45,440 --> 00:35:47,400
Speaker 1: you know, and we talked about this in an episode

597
00:35:47,760 --> 00:35:52,000
Speaker 1: several weeks ago at Connersen. This idea that like everyone's

598
00:35:52,239 --> 00:35:54,440
Speaker 1: assumed it's always a winner for some of the reasons

599
00:35:54,480 --> 00:35:57,520
Speaker 1: you described as just like this secular shift people moving

600
00:35:57,520 --> 00:35:59,960
Speaker 1: to the cities, it's always one. Even the great finding

601
00:36:00,080 --> 00:36:03,719
Speaker 1: entral crisis didn't hit rent. Like if you think about, like, well,

602
00:36:03,719 --> 00:36:06,080
Speaker 1: what is the short case, how much of it is

603
00:36:06,080 --> 00:36:11,200
Speaker 1: it that group think essentially within the sort of rentier

604
00:36:11,239 --> 00:36:15,200
Speaker 1: class or the landlord class, just like refusing to see

605
00:36:15,400 --> 00:36:17,520
Speaker 1: the writing on the wall, and is there just sort

606
00:36:17,560 --> 00:36:19,840
Speaker 1: of I don't mean a bubble on the price sense,

607
00:36:20,040 --> 00:36:22,839
Speaker 1: but a bubble in this sort of like thinking through

608
00:36:22,960 --> 00:36:25,719
Speaker 1: that something could actually change in a way that we

609
00:36:25,760 --> 00:36:29,840
Speaker 1: haven't seen in decades. I never want to underestimate the

610
00:36:29,920 --> 00:36:33,960
Speaker 1: ability of flows to impact the market. You're speaking Tracy's

611
00:36:35,480 --> 00:36:40,680
Speaker 1: that said, I think it's a question of whether it's

612
00:36:40,719 --> 00:36:42,959
Speaker 1: a who this is a winner for. And I don't

613
00:36:42,960 --> 00:36:45,439
Speaker 1: mean you know, talent's first landlords. I mean within sort

614
00:36:45,480 --> 00:36:48,600
Speaker 1: of the investment market. So like if you're a you know,

615
00:36:49,200 --> 00:36:52,400
Speaker 1: in the capital allocation business and you want to be

616
00:36:52,440 --> 00:36:55,120
Speaker 1: a bond investor or a fixed income investor. I think

617
00:36:55,239 --> 00:36:57,160
Speaker 1: multi family is going to continue to be a great business.

618
00:36:57,520 --> 00:36:59,760
Speaker 1: But if you want to earn these sort of banans

619
00:36:59,800 --> 00:37:02,720
Speaker 1: or turns that you've been earning for the past several

620
00:37:02,760 --> 00:37:07,560
Speaker 1: decades without doing much work, then other sectors of real

621
00:37:07,640 --> 00:37:09,400
Speaker 1: estate might be a better option for your or other

622
00:37:09,440 --> 00:37:12,640
Speaker 1: sectors entirely. I just have one question, and it sort

623
00:37:12,680 --> 00:37:15,560
Speaker 1: of connects this conversation with the one we had with

624
00:37:15,640 --> 00:37:19,480
Speaker 1: Chris Salviati about rents actually moving. What advice do you

625
00:37:19,520 --> 00:37:22,799
Speaker 1: have for people who are trying to negotiate their rent

626
00:37:22,880 --> 00:37:28,719
Speaker 1: with their landlord down Obviously not up. Every situation's is specific,

627
00:37:29,680 --> 00:37:32,719
Speaker 1: so I'll do my best to generalize, but I think

628
00:37:33,640 --> 00:37:37,640
Speaker 1: you have more leverage than you think, generally speaking, if

629
00:37:37,680 --> 00:37:41,680
Speaker 1: only because a landlord, if you if you leave a

630
00:37:41,760 --> 00:37:44,719
Speaker 1: landlord probably loses a month of rent. So at the

631
00:37:44,800 --> 00:37:48,680
Speaker 1: very least you should factor that month of loss and

632
00:37:48,760 --> 00:37:53,360
Speaker 1: rent and maybe even a brography into what you know

633
00:37:53,400 --> 00:37:58,239
Speaker 1: you're negotiating for. All right, Ben Carlos Typen, thank you

634
00:37:58,280 --> 00:38:00,879
Speaker 1: so much for coming on odd Lots, and good luck

635
00:38:00,880 --> 00:38:03,520
Speaker 1: in your new endeavors. And I hope, I hope you

636
00:38:03,640 --> 00:38:20,120
Speaker 1: time the market well of this episode. Thanks wrapping Trazy.

637
00:38:20,160 --> 00:38:22,520
Speaker 1: I thought that was really fascinating, and you know, just

638
00:38:22,560 --> 00:38:25,520
Speaker 1: this idea. It's like, yes, there's obviously certain like market

639
00:38:25,600 --> 00:38:28,960
Speaker 1: changes by and demand, interest rates and all that, but

640
00:38:29,120 --> 00:38:32,720
Speaker 1: also this idea of like political changes seemed really important here. Yeah,

641
00:38:32,760 --> 00:38:36,200
Speaker 1: maybe not something that investors are really thinking about that much. Well,

642
00:38:36,239 --> 00:38:38,080
Speaker 1: a couple of things there. So One, I think it's

643
00:38:38,120 --> 00:38:41,480
Speaker 1: always like it's always a bit difficult to call a

644
00:38:41,520 --> 00:38:45,759
Speaker 1: secular shift in something, but if you're going to do

645
00:38:45,800 --> 00:38:49,279
Speaker 1: it the sort of post pandemic environment, when there does

646
00:38:49,320 --> 00:38:52,000
Speaker 1: seem to be a lot of momentum behind, you know,

647
00:38:52,120 --> 00:38:55,920
Speaker 1: the labor class versus the capitalists, that seems to be

648
00:38:55,920 --> 00:38:58,359
Speaker 1: the time to do it well. And also it's like,

649
00:38:58,440 --> 00:39:00,879
Speaker 1: you know, you and I ran to New York City

650
00:39:00,920 --> 00:39:04,160
Speaker 1: and we probably know a lot of people friends who

651
00:39:04,200 --> 00:39:07,600
Speaker 1: are like professionals and have good salaries, et cetera, and

652
00:39:07,800 --> 00:39:10,759
Speaker 1: who rent and who feel that like buying is very

653
00:39:10,840 --> 00:39:14,040
Speaker 1: risky or unattainable or like put you know, they can't

654
00:39:14,160 --> 00:39:16,720
Speaker 1: haven't saved up for a down payment or for whatever reason.

655
00:39:17,000 --> 00:39:18,799
Speaker 1: And it's like this idea that it's like, well, like

656
00:39:18,880 --> 00:39:21,839
Speaker 1: this is like a very you know, there's the traditional

657
00:39:22,000 --> 00:39:26,320
Speaker 1: like sort of like more marginalized rent or class more professionalized,

658
00:39:26,360 --> 00:39:28,839
Speaker 1: and so like this coming together seems like a very

659
00:39:28,880 --> 00:39:33,600
Speaker 1: like potentially like powerful macro secular trend. Yeah, but the

660
00:39:33,680 --> 00:39:35,600
Speaker 1: key thing I think is always going to be the

661
00:39:35,600 --> 00:39:38,200
Speaker 1: policy and whether or not you do start to see

662
00:39:38,239 --> 00:39:43,919
Speaker 1: those sort of institutional protections renters like you do in

663
00:39:44,000 --> 00:39:46,760
Speaker 1: some other countries. And I know, I think we've spoken

664
00:39:46,800 --> 00:39:51,319
Speaker 1: about Germany. We're gonna have to doy Austria. So why

665
00:39:51,360 --> 00:39:53,800
Speaker 1: the Austrian rental market is so different to the US.

666
00:39:53,920 --> 00:39:56,799
Speaker 1: Let's do that. And also that point about like there

667
00:39:56,880 --> 00:40:00,320
Speaker 1: is a big institutional face of landlords. I thought it

668
00:40:00,400 --> 00:40:03,480
Speaker 1: was like super fascinating. So the way that like Amazon

669
00:40:03,640 --> 00:40:07,839
Speaker 1: becomes a good or Starbucks becomes a target of labor organizing,

670
00:40:08,120 --> 00:40:11,600
Speaker 1: you start to have this similar dynamics with tenant organizing.

671
00:40:11,840 --> 00:40:16,200
Speaker 1: Never underestimate the power of a scapegoat. Yeah, totally, all right,

672
00:40:16,239 --> 00:40:18,080
Speaker 1: shall we leave it there. Let's leave it there. This

673
00:40:18,120 --> 00:40:21,040
Speaker 1: has been another episode of the All Thoughts podcast. I'm

674
00:40:21,040 --> 00:40:24,160
Speaker 1: Tracy Alloway. You can follow me on Twitter at Tracy Alloway.

675
00:40:24,200 --> 00:40:27,240
Speaker 1: And I'm Joe Wisntal. You can follow me on Twitter

676
00:40:27,440 --> 00:40:31,120
Speaker 1: at the Stalwart. Follow our guest Ben Carlos typing. He's

677
00:40:31,280 --> 00:40:34,680
Speaker 1: at so Bendito slide into his DMS. Made an offer

678
00:40:34,719 --> 00:40:37,480
Speaker 1: on one of his buildings. Make but if you're listening

679
00:40:37,480 --> 00:40:39,440
Speaker 1: to him making the very case, I don't really know

680
00:40:39,440 --> 00:40:42,879
Speaker 1: why you'd wanted to. Follow our producers Kerman Rodriguez at

681
00:40:42,960 --> 00:40:46,799
Speaker 1: Kerman Arman and Dash Bennett at Dashbot and check out

682
00:40:46,840 --> 00:40:50,719
Speaker 1: all of our podcasts under the handle at Podcasts, and

683
00:40:50,960 --> 00:40:54,759
Speaker 1: for more Oddlots content, go to Bloomberg dot com slash Oddlots,

684
00:40:54,960 --> 00:40:57,759
Speaker 1: where we post transcripts. Tracy and I blog and we

685
00:40:57,800 --> 00:41:00,920
Speaker 1: have a weekly newsletter that comes out of your Thanks

686
00:41:00,920 --> 00:41:01,440
Speaker 1: for listening,