WEBVTT - Consumer Retail Spending Remains Resilient 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.280 --> 0:00:22.520 We want to get back to what's really been dominant 0:00:22.880 --> 0:00:25.159 in the earning space this week, and that is the 0:00:25.239 --> 0:00:25.880 retail world. 0:00:25.920 --> 0:00:26.400 And we've got a. 0:00:26.360 --> 0:00:29.320 Great voice to walk us through the earnings we've gotten 0:00:29.320 --> 0:00:32.520 so far, the earning still to come this weekend next 0:00:32.520 --> 0:00:35.000 week with us is Dana Telsey. She's founder in the 0:00:35.040 --> 0:00:37.560 CEO of Telsey Advisory Group, a top rank to equity 0:00:37.600 --> 0:00:41.200 research Alice covering all things retail, and she has for 0:00:41.360 --> 0:00:43.519 a while and has such a great perspective. She's with 0:00:43.640 --> 0:00:45.879 us on zoom in New York City. Hey, Dana's so 0:00:46.040 --> 0:00:48.440 nice to have you here with Matt and myself. First 0:00:48.520 --> 0:00:51.040 of all, we have gotten some earnings. We got TJX 0:00:51.680 --> 0:00:55.520 out Target, we had Home Depot yesterday, Walmart to come tomorrow. 0:00:55.680 --> 0:00:56.280 So far? 0:00:56.960 --> 0:00:59.800 Is there broad theme? And I know not all retails 0:01:00.080 --> 0:01:02.360 the same, so maybe that's an unfair question, but how 0:01:02.400 --> 0:01:03.840 are you seeing the results so far? 0:01:04.640 --> 0:01:06.560 First of all, thank you so much for having me, 0:01:06.760 --> 0:01:10.000 absolutely thrilled to be here, and yes, in terms of retail, 0:01:10.040 --> 0:01:13.199 we've gotten some results so far. I'd say the puts 0:01:13.240 --> 0:01:17.280 and takes bottom line is discretionary spending is still soft, 0:01:17.319 --> 0:01:20.120 and it's soft almost across the board. I'd say that 0:01:20.280 --> 0:01:23.200 traffic in stores has picked up. That was good to 0:01:23.240 --> 0:01:27.160 hear about both from Target and from TJX. The focus 0:01:27.200 --> 0:01:31.319 on value is definitely key, and we're seeing the continued 0:01:31.360 --> 0:01:35.320 strength of essentials stronger than discretionary. I'd say what I 0:01:35.400 --> 0:01:38.560 worry about overall is that for some of the companies 0:01:38.600 --> 0:01:42.640 that have reported, it certainly seems as if they're taking 0:01:42.680 --> 0:01:45.880 that they beat the first quarter, they're adjusting the second 0:01:45.959 --> 0:01:49.800 quarter a little bit lower and expecting the back half 0:01:49.880 --> 0:01:52.920 of the year to be a big uptick. And that's 0:01:52.960 --> 0:01:57.080 the big question mark with the concerns about rising inflation, 0:01:58.000 --> 0:02:01.520 rising interest rates and frankly maybe it's moderating inflation, but 0:02:01.600 --> 0:02:06.280 are consumers spending more on experiences or services then they're 0:02:06.320 --> 0:02:09.240 spending on goods. I'd say, so far, it seems like 0:02:09.320 --> 0:02:12.400 TJX is one of the best results out there, given 0:02:12.440 --> 0:02:15.919 the fact that the traffic goes up, their inventories is 0:02:15.960 --> 0:02:19.960 definitely being managed well, and they saw parallel accessories do well. 0:02:20.240 --> 0:02:23.160 I thought that Tapestry's numbers are also had been very 0:02:23.200 --> 0:02:25.960 good too, given the strength that they've seen in the 0:02:25.960 --> 0:02:30.160 continued AUR increases and frankly the continued strength of Physical. 0:02:30.600 --> 0:02:33.399 So bottom line is that lower to middle income consumer 0:02:33.520 --> 0:02:37.040 is still cautious. I think there's greater spend on experiences 0:02:37.080 --> 0:02:40.240 than goods. The fact where there are goods spending, it 0:02:40.280 --> 0:02:44.320 definitely is on essentials. And the moderation of discretionary is 0:02:44.360 --> 0:02:47.480 coming at all income levels. And we're fortunate that the 0:02:47.520 --> 0:02:50.200 balance sheets of these companies happen to be pretty solid. 0:02:50.240 --> 0:02:52.440 You mentioned AUR, so we're talking about average unit retail 0:02:52.480 --> 0:02:55.320 just for those listening in case you were wondering. 0:02:56.240 --> 0:03:00.800 You know, I think exactly what you were saying about. 0:03:00.960 --> 0:03:03.480 You know, the pattern these companies are following is what 0:03:03.760 --> 0:03:05.880 is how I see Target. And I was telling Carol, 0:03:06.200 --> 0:03:08.520 you know before the show kicked off, this is something 0:03:08.520 --> 0:03:10.440 they might regret. You know, they're gonna have to cut 0:03:10.480 --> 0:03:12.800 their forecast down the road, because yes, they had a 0:03:12.840 --> 0:03:15.280 good Q one and now they're in the middle of 0:03:15.320 --> 0:03:18.360 a soft Q two, and I guess they're taking a 0:03:18.400 --> 0:03:23.000 gamble with holding their forecast steady, you know, and that 0:03:23.400 --> 0:03:25.919 could come home. It could come back and bite them 0:03:25.919 --> 0:03:28.320 in the end, right. I mean, I'm looking right now, 0:03:28.440 --> 0:03:32.359 Dana at US credit card debt and I've maxed out 0:03:32.360 --> 0:03:32.800 the chart. 0:03:33.160 --> 0:03:35.520 It's the highest that it's ever been. 0:03:35.880 --> 0:03:40.960 Meanwhile, the savings rate has dropped substantially, and I can't 0:03:40.960 --> 0:03:43.960 get the bank balances up on my terminal, but I'm 0:03:44.000 --> 0:03:45.600 suspecting that they come down. 0:03:46.600 --> 0:03:50.640 Yeah, that's the concern. I mean, the concern is, is 0:03:50.680 --> 0:03:54.400 a hockey stick of twenty twenty three gonna be realistic 0:03:54.680 --> 0:03:59.560 when the initial expectations for holiday twenty twenty three is 0:03:59.560 --> 0:04:01.200 not going to be as great as it was in 0:04:01.240 --> 0:04:05.160 holiday twenty two. The two offsets are the fact that 0:04:05.240 --> 0:04:10.120 we have reduced supply chain costs, lower ocean rates, using 0:04:10.200 --> 0:04:13.640 less air, So that's one element, and the second element 0:04:13.760 --> 0:04:19.359 is inventory's lighter. So inventory's lighter, there's more flexibility with 0:04:19.520 --> 0:04:23.760 retailers focused on chasing into demand when the demand arrives. 0:04:24.040 --> 0:04:26.000 And that's what we're all going to be watching very 0:04:26.040 --> 0:04:28.520 carefully as we head into the third quarter. 0:04:28.880 --> 0:04:31.240 You know, we haven't even talked about kind of department 0:04:31.279 --> 0:04:33.400 stores and stuff. Well, how do you think about them 0:04:33.480 --> 0:04:34.880 data it's. 0:04:34.760 --> 0:04:37.800 Going to be very interesting. Dillard's obviously reported last week 0:04:37.839 --> 0:04:40.400 and when one of the commentaries that Dillard said, which 0:04:40.440 --> 0:04:44.240 is meaningful for everyone, is the fact that consumer activity 0:04:44.360 --> 0:04:47.560 decelerated in the back half of the quarter. So that 0:04:47.720 --> 0:04:50.400 means that back half of the quarter basically at least 0:04:50.440 --> 0:04:53.400 the month of April. And we heard that March was weak, 0:04:53.760 --> 0:04:56.400 and so now to say April is week two, that's 0:04:56.440 --> 0:04:59.880 a concern. If you have to say the department stores, 0:05:00.200 --> 0:05:03.880 I worry about Cohle's, I worry about Nordstrom. It seems 0:05:03.920 --> 0:05:06.719 like Macy's, with the strategy that they have in place 0:05:06.760 --> 0:05:11.799 with Polarios, Polaris and basically modernizing the department store, they've 0:05:11.839 --> 0:05:15.640 really been at the forefront of enhancing change, and I 0:05:15.720 --> 0:05:18.520 feel like some of their results may be a little 0:05:18.560 --> 0:05:20.640 bit better than what we see in some of the others. 0:05:21.880 --> 0:05:25.279 All right, by the way, like on Q John Authurs 0:05:25.360 --> 0:05:27.800 just sent me a chart of US bank balances. 0:05:27.480 --> 0:05:27.800 Or did he? 0:05:27.880 --> 0:05:28.159 Really? 0:05:28.240 --> 0:05:31.480 They're still very strong, So to me, it's a puzzle. 0:05:31.520 --> 0:05:33.320 I mean, they've come down that has come out with me. 0:05:33.320 --> 0:05:36.120 They come down a little bit, but they're still very strong. 0:05:36.200 --> 0:05:38.720 And then I wonder why are consumers putting so much 0:05:38.760 --> 0:05:43.400 on plastic Dana, do you know why we're utilizing credit cards? 0:05:43.960 --> 0:05:46.200 You know, at the highest pace that we have in 0:05:46.279 --> 0:05:47.760 at least ten years. 0:05:48.560 --> 0:05:51.680 Well, in the near term, the savings rate has come 0:05:51.720 --> 0:05:54.679 down a little bit, and you are seeing people spending 0:05:54.720 --> 0:05:58.200 more on travel and experiences. Typically that spend goes on 0:05:58.800 --> 0:05:59.360 credit cards. 0:05:59.440 --> 0:06:02.360 Good point. Good point is a good point, all right. 0:06:02.400 --> 0:06:05.520 So when you look at the outlook here, if you 0:06:05.600 --> 0:06:08.440 had to say, and I'm thinking about the Bloomberg investor audience, 0:06:08.720 --> 0:06:11.080 who are the most vulnerable as we look at the 0:06:11.240 --> 0:06:13.640 kind of second half of the year into twenty twenty four, 0:06:13.680 --> 0:06:15.279 and who are the best position data? 0:06:16.040 --> 0:06:18.359 Well, keep in mind we still have the majority of 0:06:18.440 --> 0:06:21.280 retailers yet to report their earnings and hear what the 0:06:21.360 --> 0:06:24.560 update to their guidance is. When we know in terms 0:06:24.600 --> 0:06:28.159 of who's who's been having challenges to begin with, you're 0:06:28.200 --> 0:06:31.280 definitely watching some of those department stores like a Nordstrum 0:06:31.360 --> 0:06:34.799 and likea Coohles. I think you're definitely continuing to watch 0:06:34.839 --> 0:06:38.280 some of the specialty retailers, for example, and watching how 0:06:38.400 --> 0:06:42.080 Gap maneuvers through the changes that they're having. Given they're 0:06:42.120 --> 0:06:44.320 still searching for a new CEO. 0:06:45.400 --> 0:06:45.880 Walmart. 0:06:45.920 --> 0:06:49.720 We didn't even touch on Walmart. Truefore the bell yeap, 0:06:50.200 --> 0:06:51.440 what should we keep on our radar? 0:06:51.960 --> 0:06:54.440 I mean, given that we had Target with a better 0:06:54.480 --> 0:06:57.359 than expected first quarter, and we know that Walmart is 0:06:57.400 --> 0:07:00.839 so essential focused, it almost feels as if we should 0:07:00.920 --> 0:07:04.400 have some decent results out of Walmart while looking towards 0:07:04.400 --> 0:07:07.560 what they're expecting for the second quarter and the back 0:07:07.600 --> 0:07:10.680 half of the year. They do have more international exposure. 0:07:11.120 --> 0:07:14.600 Everything we've heard about international lately has been good. You 0:07:14.680 --> 0:07:18.000 take a look at what TJX reported both on Canada 0:07:18.120 --> 0:07:19.880 and on international, and it was. 0:07:19.880 --> 0:07:24.120 Strength if those you know, if we do go into 0:07:24.160 --> 0:07:27.000 a recession and it's deep enough to really feel it, 0:07:27.480 --> 0:07:30.080 which are the stores that benefit the most from, you know, 0:07:30.160 --> 0:07:31.200 consumers stepping down? 0:07:31.280 --> 0:07:32.640 I can no longer afford to. 0:07:32.600 --> 0:07:35.600 Go to I don't know the neighborhood Target, So do 0:07:35.680 --> 0:07:37.560 I drive out to Costco instead? 0:07:38.600 --> 0:07:38.960 It could be. 0:07:39.040 --> 0:07:42.840 Costco, it's the dollar stores, it's the off Pricers, and 0:07:42.880 --> 0:07:45.720 it's the discounters. So it could be your Walmart and Target, 0:07:45.840 --> 0:07:49.000 your Dollar General and Dollar Tree and five below. It 0:07:49.080 --> 0:07:52.800 is Costco, and it's also TJX Ross stores in Burlington. 0:07:53.000 --> 0:07:55.560 You know, auto sales were very strong in April. 0:07:55.600 --> 0:07:58.600 I was really surprised by how much Americans are willing 0:07:58.640 --> 0:08:02.200 to spend to buy new Is that the last hurrah 0:08:02.200 --> 0:08:03.760 for the automakers. 0:08:04.280 --> 0:08:07.120 May not be? I mean you're certainly continuing to see 0:08:07.160 --> 0:08:10.360 the new enhancements and the new deals. And we know 0:08:10.400 --> 0:08:12.880 what consumers are focused on and if they're going to 0:08:12.920 --> 0:08:14.600 be traveling, how are they going to get there? We 0:08:14.640 --> 0:08:18.280 know what with Memorial Day weekend comes what that means 0:08:18.320 --> 0:08:18.840 to travel? 0:08:18.920 --> 0:08:21.400 Hey, just got twenty five seconds left. I wanted to 0:08:21.400 --> 0:08:23.720 squeeze in. Matt. Initially on our morning call was talking 0:08:23.720 --> 0:08:26.400 about watches of Switzerland Group the top seller of Rolex 0:08:26.440 --> 0:08:29.240 time pieces. What is in twenty seconds stand of the 0:08:29.280 --> 0:08:31.000 thought about high end versus low end? 0:08:31.960 --> 0:08:35.319 High end's moderating. Also, we've seen a moderation in high end. 0:08:35.440 --> 0:08:37.800 We need some of the foreign travelers and tourists to 0:08:37.840 --> 0:08:40.280 come over here, so there's a moderation at the high 0:08:40.360 --> 0:08:41.480 end too. 0:08:41.520 --> 0:08:43.839 I also think Rolex is maybe a stone story. It's 0:08:43.840 --> 0:08:45.040 a very special story. 0:08:45.320 --> 0:08:49.680 It is a special story more. You know. Actually, Bloomberg 0:08:49.679 --> 0:08:52.439 Business Week Pursuits has covered a lot in terms of watching. 0:08:52.240 --> 0:08:54.680 And Andy Hoffman is our definitive voice on rolex. 0:08:54.720 --> 0:08:56.760 Al right, so maybe we'll do Mark. But Dana is 0:08:56.760 --> 0:08:59.959 a definitive on retail. Dana Telsey of Tels the advisory thing. 0:09:00.160 --> 0:09:04.200 You you're listening to the Bloomberg Business Week podcast. Catch 0:09:04.280 --> 0:09:07.640 us live weekday afternoons from three to six Eastern Listen 0:09:07.679 --> 0:09:11.160 on Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:09:11.200 --> 0:09:13.840 Business app, or watch us live on YouTube. 0:09:15.120 --> 0:09:18.600 Last month, Bloomberg News putting out a story reporting that 0:09:19.760 --> 0:09:22.760 an international developer back by Tiger Woods and justin Timberlake, 0:09:22.800 --> 0:09:25.719 we're joining an effort to build a sprawling residential community 0:09:25.720 --> 0:09:30.280 with stores and a revamped golf course in Wellington. It's 0:09:30.280 --> 0:09:34.000 a South Florida equestrian town near Palm Beach. It's also 0:09:34.120 --> 0:09:38.360 Wellington has been, I guess, home to Microsoft co founder 0:09:38.400 --> 0:09:42.080 Bill Gates. I've heard of it, Tommy Lee Jones, Bruce Springsteen. 0:09:42.280 --> 0:09:44.880 Tommy Lee Jones, the actor, that's the actor. 0:09:44.960 --> 0:09:47.200 They've owned homes there, apparently. I don't know if they 0:09:47.200 --> 0:09:47.959 still do, but they have. 0:09:49.040 --> 0:09:52.800 That is interesting kind of she I guess, so I'm 0:09:52.800 --> 0:09:54.240 not really a South Florida guy. 0:09:54.520 --> 0:09:55.800 Did you like the keys? 0:09:56.040 --> 0:09:57.680 You know, Palm Beach kind of nice. 0:09:58.160 --> 0:10:01.720 Yeah, it's okay. I've been there. Okay, you know State 0:10:01.760 --> 0:10:03.520 of the Breakers did the whole golf thing kind of. 0:10:03.520 --> 0:10:05.400 A kind of a New york A kind of price. 0:10:05.520 --> 0:10:07.560 Yeah, it was pretty good. I mean, if I have 0:10:07.720 --> 0:10:10.440 vacation time, I'm going to go somewhere different. 0:10:10.600 --> 0:10:12.200 Okay, if I want to go to the beach, it's 0:10:12.200 --> 0:10:14.800 about living to a secluded beach. If I want to 0:10:14.920 --> 0:10:17.560 move somewhere like, you know, I would rather have the mountains. 0:10:17.559 --> 0:10:18.920 I'm more of a Montana person. 0:10:19.960 --> 0:10:22.440 I have seen you wear a cowboy hates actually around 0:10:22.720 --> 0:10:24.319 cowboy boots. Do you have cowboy boots? 0:10:24.400 --> 0:10:26.360 I have a two pairs of Cowboy every time I 0:10:26.360 --> 0:10:29.079 go to Dallas, you know, I tend to buy a pair. 0:10:29.160 --> 0:10:31.319 My goddaughter lives in Dallas, so I go there occasionally. 0:10:31.440 --> 0:10:33.240 I have to go watch the Giants play the Cowboys. 0:10:33.280 --> 0:10:35.200 We want to talk South Florida with someone who knows 0:10:35.240 --> 0:10:36.880 a lot about what's going on when it comes to 0:10:36.960 --> 0:10:39.720 South Florida real estate. Daniel de la Vega, president of 0:10:39.720 --> 0:10:43.840 One Southby's International Reality joins us on Zoom from Miami. Daniel, 0:10:43.920 --> 0:10:46.760 good to be talking with you, uh, and great to 0:10:46.800 --> 0:10:48.960 have you here with Matt myself. Hey, talk to us 0:10:48.960 --> 0:10:51.120 a little bit about South Florida and what's going on. 0:10:51.800 --> 0:10:54.160 What are we seeing in terms of prices and valuations. 0:10:55.120 --> 0:10:58.360 You know, South Florida is in an incredible place right now. 0:10:58.679 --> 0:11:01.200 First quarter was incredible. I want to talk about the numbers. 0:11:01.240 --> 0:11:03.360 I want to give you all the information that the 0:11:03.480 --> 0:11:07.000 viewers want. But first, Matt, what a segue into talking 0:11:07.040 --> 0:11:07.920 about South Florida. 0:11:07.960 --> 0:11:09.760 We got to get you down here. Maybe you have 0:11:09.880 --> 0:11:11.600 not experienced it with me yet, so. 0:11:11.960 --> 0:11:13.079 I think you know part of it. 0:11:13.160 --> 0:11:14.960 Daniel's going to have things that you love. 0:11:15.200 --> 0:11:18.960 I'm a little bit bitter because, to be honest, a 0:11:19.000 --> 0:11:22.199 lot of my friends from the Upper West Side, previously 0:11:22.400 --> 0:11:24.600 from the Upper West Side of New York City, are 0:11:24.640 --> 0:11:27.199 now living down in West Palm Beach, and it's like. 0:11:27.280 --> 0:11:31.200 One after the other after the other, and now it's 0:11:31.200 --> 0:11:32.680 like I don't know anyone else up here. 0:11:33.280 --> 0:11:36.360 Yeah, I mean, listen, We're representing Peer sixty six in 0:11:36.440 --> 0:11:40.800 Fort Lauderdale, which is Tabstock Development Group, which you previously 0:11:40.880 --> 0:11:44.840 mentioned in regards to the development in Wellington, and that 0:11:45.000 --> 0:11:48.200 is just the epitome of South Florida. Living with a 0:11:48.240 --> 0:11:51.840 marina with a hotel with residences. So they do a really, 0:11:51.840 --> 0:11:54.320 really great job. And I'm sure Wellington is going to 0:11:54.320 --> 0:11:56.000 be spectacular as well. 0:11:56.280 --> 0:11:58.880 But look, South Florida is doing incredibly well. 0:11:58.920 --> 0:12:01.480 Guys from another see he keep saying, yeah, give us 0:12:01.480 --> 0:12:03.280 some numbers because you keep saying incredible. 0:12:04.080 --> 0:12:09.080 We saw we saw a major increase in closed sales, 0:12:09.160 --> 0:12:12.960 average sales price, new pending sales, months of inventory, yes, 0:12:13.040 --> 0:12:13.319 is up. 0:12:13.360 --> 0:12:17.520 But in close sales in all of South Florida Q. 0:12:17.640 --> 0:12:20.400 Four twenty two over Q one, we saw fourteen point 0:12:20.440 --> 0:12:24.520 seven percent increase average sales price. We saw a six 0:12:24.559 --> 0:12:28.640 point six percent increase. New pending sales were up sixty 0:12:29.000 --> 0:12:33.120 six percent. I mean, that's an incredible statistic, right, And again, 0:12:33.440 --> 0:12:37.640 months of inventory in both single family homes and condominiums 0:12:38.000 --> 0:12:41.200 are up on average twenty percent. 0:12:41.480 --> 0:12:43.800 So that's good because as. 0:12:43.640 --> 0:12:46.679 We see people moving to South Florida, we want them 0:12:46.720 --> 0:12:49.000 to feel like it's an affordable place for them to live. 0:12:49.360 --> 0:12:52.360 So as I see the increase in inventory as a 0:12:52.400 --> 0:12:53.560 positive for our market. 0:12:53.960 --> 0:12:57.040 I mean, one of my best friends is a I 0:12:57.040 --> 0:12:59.920 won't say his name, but Morgan Stanley guy. He was 0:13:00.120 --> 0:13:03.200 up here now he's moved down there. His office is 0:13:03.320 --> 0:13:05.280 he says, just a couple of blocks away from his 0:13:05.320 --> 0:13:08.080 place in West Palm Beach. And he says, the restaurants 0:13:08.160 --> 0:13:11.280 and the bars that he and his you know, click 0:13:11.480 --> 0:13:14.160 No and love from up here all operate down there 0:13:14.240 --> 0:13:16.640 as well. So is it really just like a slice 0:13:16.640 --> 0:13:19.720 of Manhattan, you know in Florida? 0:13:20.800 --> 0:13:21.000 Yeah. 0:13:21.040 --> 0:13:23.520 I mean, look, we've always said Manhattan South, but I 0:13:23.559 --> 0:13:27.120 think we're becoming Manhattan more and more. I mean, we 0:13:27.160 --> 0:13:31.199 had one hundred and thirty new companies moved to Miami alone. 0:13:31.200 --> 0:13:34.120 We had we had twelve percent of the five point 0:13:34.120 --> 0:13:39.199 eight million new business application filed nationally happen in the 0:13:39.240 --> 0:13:42.600 state of Florida. A lot of that happening in South Florida. 0:13:42.679 --> 0:13:45.160 You just heard the numbers from Miami. So look, we've 0:13:45.160 --> 0:13:47.600 got twelve hundred and seventeen people moving here a day. 0:13:47.920 --> 0:13:51.199 I don't see those numbers slowing down. And to your point, right, 0:13:51.240 --> 0:13:53.720 it's not just the jobs that are moving, it's the 0:13:53.760 --> 0:13:57.280 families that are moving. And we've seen a new influx 0:13:57.360 --> 0:13:59.439 of the kind of person that moves here. I mean, 0:14:00.040 --> 0:14:02.920 and we saw we traditionally, we saw flight capital, we 0:14:03.000 --> 0:14:06.200 saw a lot of Latin America. We've seen fifty percent 0:14:06.360 --> 0:14:10.640 more domestic now over the last call it twenty four months. 0:14:10.720 --> 0:14:12.760 So it's people living here to live here. 0:14:12.760 --> 0:14:14.719 So they want those things that you're talking about, man, 0:14:14.760 --> 0:14:16.920 and we're delivering them. I mean, look, just think West 0:14:16.960 --> 0:14:20.320 Palmer had lunch at the Bar at Alicia, an incredible restaurant. 0:14:20.480 --> 0:14:22.280 It's a sister restaurant, the st Ambrose. 0:14:22.320 --> 0:14:25.360 So everybody's thinking creatively, how how they can bring new 0:14:25.400 --> 0:14:26.360 brands to our market. 0:14:26.520 --> 0:14:29.520 Daniel, how much of it is finance and financial types 0:14:29.560 --> 0:14:30.360 that are moving there? 0:14:30.960 --> 0:14:33.440 Eighty percent of our transactions. 0:14:32.720 --> 0:14:36.800 Are cash that was happening during the pandemic and we're 0:14:36.920 --> 0:14:38.280 still seeing that happen now. 0:14:38.320 --> 0:14:39.040 No, no, no, no. 0:14:39.040 --> 0:14:40.880 I mean how much of it is people from the 0:14:40.920 --> 0:14:43.360 financial sector, because we've done those stories a lot. How 0:14:43.400 --> 0:14:45.600 much that's okay, that's okay, Yeah. 0:14:45.480 --> 0:14:48.320 It's it's you know, I would say it's about fifty 0:14:48.960 --> 0:14:51.200 fifty percent of the people moving in South Florida from 0:14:51.200 --> 0:14:51.720 the sector. 0:14:53.680 --> 0:14:55.120 Yeah, it really is. 0:14:55.520 --> 0:14:58.720 Like Wall Street has moved down, not just New York, right, 0:14:58.840 --> 0:15:02.520 but Chicago is one of the big citadel Ken Griffith Offices, 0:15:02.600 --> 0:15:07.240 Ken Griffin's company moving down there? Is it is it 0:15:07.400 --> 0:15:11.360 just pushing property values up in the surrounding communities as well. 0:15:11.360 --> 0:15:14.160 I imagine you know, I'm from a small town in Ohio, Grandville, 0:15:14.280 --> 0:15:18.440 right outside of Columbus. Intel build a fabric a factory 0:15:19.040 --> 0:15:22.160 near us, and all of a sudden, everybody's property values 0:15:22.200 --> 0:15:23.040 have like doubled. 0:15:23.160 --> 0:15:24.640 Do you see that as well down there? 0:15:25.160 --> 0:15:28.080 Yeah, it's the same here, and it's the secondary and 0:15:28.160 --> 0:15:30.920 tertiary markets as well within Stock Florida, not just the 0:15:30.960 --> 0:15:32.920 waterfront ultra luxury markets. 0:15:33.720 --> 0:15:36.240 We have to deal with affordability. We are dealing with 0:15:36.280 --> 0:15:37.880 it with affordability. 0:15:37.920 --> 0:15:40.640 There's some new legislation that's come down which allows for 0:15:40.720 --> 0:15:41.360 more density. 0:15:41.400 --> 0:15:43.920 For certain I'm not an affordable guy, but you know, 0:15:43.960 --> 0:15:44.960 it's very. 0:15:44.800 --> 0:15:47.040 Positive for our markets because I think it's something that's 0:15:47.040 --> 0:15:49.920 needed so we can really service every sector. 0:15:50.360 --> 0:15:52.680 Daniel, I'm curious. I'm looking at your website. There are 0:15:52.720 --> 0:15:55.400 properties below a million dollars, and then there's properties that 0:15:55.440 --> 0:15:57.880 are for tens of millions of dollars or twenty five 0:15:57.920 --> 0:15:59.920 million dollars. So give me an idea in term of 0:16:01.120 --> 0:16:04.440 the type of activity you have, what types of properties 0:16:04.440 --> 0:16:07.160 are selling the most. 0:16:07.840 --> 0:16:11.320 The ultra luxury market is probably trading for the highest 0:16:11.320 --> 0:16:15.480 prices per square foot we're seeing the most activity in 0:16:15.520 --> 0:16:16.240 the one to. 0:16:16.280 --> 0:16:17.960 Five million dollar price point. 0:16:18.400 --> 0:16:21.280 That's where you're seeing a lot of the inventory increases 0:16:21.280 --> 0:16:23.640 as well, whether you look at the Florida numbers or 0:16:23.680 --> 0:16:25.760 just the South Florida numbers or the. 0:16:25.800 --> 0:16:28.120 Entire East Coast of Florida numbers where we operate. 0:16:28.360 --> 0:16:31.640 So I would say that that's been the the segment 0:16:31.720 --> 0:16:34.400 where you're seeing the most amount of transactions stepinitely, And. 0:16:34.400 --> 0:16:36.480 That's where you said how much what was the percentage 0:16:36.480 --> 0:16:38.440 that most of these are done in cash? Though most 0:16:38.440 --> 0:16:39.440 of this is done in cash. 0:16:39.720 --> 0:16:42.360 Yeah, eighty percent of our transactions are done in cash. 0:16:42.480 --> 0:16:45.800 And we're still seeing that Q one, you know, with 0:16:45.920 --> 0:16:47.960 interest rates going up the way they are, which has 0:16:48.040 --> 0:16:49.240 definitely affected the market. 0:16:49.320 --> 0:16:52.080 I think Q four saw it, you know. 0:16:52.160 --> 0:16:56.080 I mean, we companies across the country were down, you know, 0:16:56.160 --> 0:16:57.000 over forty percent. 0:16:57.080 --> 0:16:58.080 Think Guide you didn't. 0:16:57.840 --> 0:16:58.480 Have me on then. 0:16:58.760 --> 0:17:00.880 But if people are doing mostly right, they don't care 0:17:00.880 --> 0:17:01.840 about the interest rates. 0:17:02.040 --> 0:17:03.880 They don't care about the interest rates so much. 0:17:04.160 --> 0:17:06.280 In a lot of our new development products, whether it's 0:17:06.320 --> 0:17:08.960 Peer sixty six that I just mentioned, if we Lauderder 0:17:09.040 --> 0:17:10.720 or the Saint Regis residences here. 0:17:10.560 --> 0:17:11.840 In Miami, on brickles. 0:17:12.119 --> 0:17:15.639 These buyers have a longer sort of horizon as to 0:17:15.720 --> 0:17:17.720 when they're going to move in, right, So it's a 0:17:17.760 --> 0:17:21.040 three year, four year cycle, and they're okay because they 0:17:21.119 --> 0:17:22.760 know that interest rates are temporary. 0:17:23.040 --> 0:17:27.040 Little footnote here when the hurricanes come in, this is 0:17:27.040 --> 0:17:29.920 not where they go, right is Miami is West Palm Beach. 0:17:30.000 --> 0:17:33.560 Those people are safer than like Naples. 0:17:33.680 --> 0:17:33.840 Right. 0:17:34.840 --> 0:17:38.320 Well, I would say that we're all in harm's way 0:17:38.800 --> 0:17:42.080 when mother nature wants to have their. 0:17:41.960 --> 0:17:44.080 Way, but it's more up towards the gulf. 0:17:44.480 --> 0:17:48.280 By what's happening traditionally, Yeah, not traditionally. What's happened over 0:17:48.320 --> 0:17:50.600 the last five years is most of them have been 0:17:50.640 --> 0:17:54.240 going through the golf or missing us here in South 0:17:54.280 --> 0:17:59.240 Florida and up the eastern, up the East coast. So 0:17:59.320 --> 0:18:02.000 we've been very lucky, and I pray that we continue 0:18:02.040 --> 0:18:02.560 to be lucky. 0:18:02.880 --> 0:18:03.199 All right. 0:18:03.200 --> 0:18:05.280 Got to leave it on that note. Hey, Daniel, great 0:18:05.320 --> 0:18:07.840 to check in with. You appreciate it. Daniel de la Vega, 0:18:08.000 --> 0:18:10.159 president of once Southeby's Intes getting a call when I 0:18:10.240 --> 0:18:12.400 come down on zoom from Miami. 0:18:13.200 --> 0:18:16.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:16.800 --> 0:18:20.800 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:18:21.000 --> 0:18:24.280 the Bloomberg Business App, and YouTube. You can also listen 0:18:24.400 --> 0:18:27.480 live on Amazon Alexa from our flagship New York station, 0:18:27.920 --> 0:18:30.720 Just say Alexa Play Bloomberg eleven thirty. 0:18:32.440 --> 0:18:33.680 We want to talk a bit about the M and 0:18:33.720 --> 0:18:37.000 A environment, because the US government's aggressive stance on antitrust 0:18:37.119 --> 0:18:40.679 definitely chilling murger activity among the country's biggest companies. We 0:18:40.720 --> 0:18:43.199 saw that yesterday with the FTC soon to block am 0:18:43.320 --> 0:18:46.879 Jen's almost thirty billion dollars deal to buy Horizon Therapeutics. 0:18:46.920 --> 0:18:49.000 So there's a lot going on. M and A deals. 0:18:49.000 --> 0:18:50.520 I don't know if you saw this in North America 0:18:50.600 --> 0:18:52.920 mat down about thirty three percent year every year. 0:18:53.520 --> 0:18:53.800 Yeah. 0:18:53.920 --> 0:18:56.480 No, I mean if I look at mag that's what 0:18:56.520 --> 0:18:59.879 I did, right, and I see the value of all deals. Globally, 0:19:00.520 --> 0:19:03.120 we're at one point three trillion, but as we heard 0:19:03.160 --> 0:19:05.000 from I think an M and A reporter the other 0:19:05.040 --> 0:19:07.800