WEBVTT - Tellurian's Souki Expects Higher LNG Prices Globally in Two Years 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg pim L Podcast. I'm pim Fox 0:00:08.760 --> 0:00:11.440 along with my co host Lisa A. Bramowitz. Each day 0:00:11.480 --> 0:00:15.000 we bring you the most important, noteworthy, and useful interviews 0:00:15.040 --> 0:00:17.520 for you and your money, whether you're at the grocery 0:00:17.560 --> 0:00:20.560 store or the trading floor. Find the Bloomberg p and 0:00:20.680 --> 0:00:32.599 L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Yes, 0:00:32.640 --> 0:00:35.240 we're gonna talk about liquefied natural gas now because we've 0:00:35.240 --> 0:00:38.720 got a pioneer when it comes to the energy industry. 0:00:39.000 --> 0:00:41.720 My guest is Sharif Suki. He is the co founder 0:00:41.760 --> 0:00:45.000 and the chairman of Tullurian and he is the founder, 0:00:45.040 --> 0:00:48.760 former founder and former chief executive of Shanir and Sharif 0:00:48.840 --> 0:00:52.360 joins us in our studio here in UH. Great to 0:00:52.400 --> 0:00:54.240 have you with us, sir, Thanks for coming in. Thank 0:00:54.280 --> 0:00:58.920 you very much. You're the only trail blazing energy pioneer 0:00:59.040 --> 0:01:01.720 that I can think of. It is also run a 0:01:01.800 --> 0:01:05.360 chain of restaurants UH and managed to have a Hollywood 0:01:05.560 --> 0:01:10.000 Um the film colorization company already in your past. Maybe 0:01:10.040 --> 0:01:13.679 just give people a little snippet of how you came 0:01:13.760 --> 0:01:17.399 to create Shaneer and the world of liquefied natural gas. Well, 0:01:17.440 --> 0:01:20.000 I guess it's a lesson and always keeping your options 0:01:20.040 --> 0:01:21.959 open and learning as much as you can as you 0:01:22.000 --> 0:01:25.000 go along, so you never know what's going to prepare 0:01:25.040 --> 0:01:27.480 you for what. But I think in the mid nineties 0:01:27.560 --> 0:01:32.399 I was looking for a niche to invest in and 0:01:32.440 --> 0:01:34.839 to raise money, which is the scale that I hand 0:01:36.160 --> 0:01:39.200 into a sector there would be changed by technology. That's 0:01:39.240 --> 0:01:42.160 how I end up ended up being at the energy business. 0:01:42.440 --> 0:01:47.280 And slowly I learned and um Chanel was founded in 0:01:47.400 --> 0:01:52.480 nineteen ninety six and um I had twenty years and 0:01:52.520 --> 0:01:56.880 there huntil two thousan fifteen and then sure if you 0:01:57.320 --> 0:02:02.400 left Shaneer last year after carl Icon had some issues 0:02:02.520 --> 0:02:04.880 with the company, and now you've started this new venture 0:02:04.960 --> 0:02:07.160 to Laurian talld Us about that, what a what are 0:02:07.160 --> 0:02:08.880 you trying to do with Tolaian? Well, I think the 0:02:08.919 --> 0:02:11.840 major disagreement with garn at the time was simply whether 0:02:11.919 --> 0:02:14.919 you would pay dividends out or whether you read invest 0:02:14.919 --> 0:02:17.079 the money to continue the growth of the company. So 0:02:17.240 --> 0:02:20.399 I had the view that the market has just been 0:02:20.560 --> 0:02:24.080 started and that although it didn't look so good for 0:02:24.120 --> 0:02:27.560 a couple of years, it would come back, and that 0:02:27.720 --> 0:02:30.200 we needed to continue to go to a company. Carl 0:02:30.480 --> 0:02:33.840 had a different opinion and we agreed to separate, to 0:02:34.440 --> 0:02:38.480 go out separate ways Solan. So when they freed me, 0:02:38.560 --> 0:02:41.680 I had the opportunity to create to Louian In February 0:02:41.720 --> 0:02:43.760 of two thousand and sixteen. About three months after that, 0:02:43.880 --> 0:02:47.200 I was fired functioner and to pick up where the 0:02:47.280 --> 0:02:50.880 things that she Knew did not want to pursue at 0:02:50.880 --> 0:02:55.200 the time. So we founded a company, found another site 0:02:55.240 --> 0:02:58.280 that took a team that we were funding, a Chineer, 0:02:58.400 --> 0:03:02.119 but that j Knew decided to continue the funding led 0:03:02.160 --> 0:03:05.800 by Martin Houston, and Martin has become my partner. We 0:03:05.840 --> 0:03:10.760 found it two looking together and we identified a good side, 0:03:10.800 --> 0:03:14.440 took our old team back, both BECTORL and ge t 0:03:14.800 --> 0:03:18.840 to collaborate with us again and developed a pretty good 0:03:18.880 --> 0:03:22.480 site for a plant for a big processing for a 0:03:22.520 --> 0:03:26.440 big processing plant, a big liquefaction facility in Louisiana with 0:03:26.480 --> 0:03:29.960 the capacity to export twenty six million tons, which is 0:03:30.040 --> 0:03:33.600 really replicating the success that I had antinue with the 0:03:33.760 --> 0:03:37.520 twenty four million tons plant at Sebin Pass. Can you 0:03:37.560 --> 0:03:40.280 speak a little bit about the supply and demand that 0:03:40.320 --> 0:03:43.720 currently exists in natural gas because to turn it into 0:03:43.840 --> 0:03:48.560 liquefied natural gas requires this major investment in process. Uh. 0:03:48.720 --> 0:03:52.480 And then there is not really a global pricing uh 0:03:52.800 --> 0:03:55.640 platform for for natural gases there. I mean, it costs 0:03:55.680 --> 0:04:01.160 different things in different countries. You exactly right. Uh. So 0:04:01.560 --> 0:04:04.320 there's a number of things that happened that are different 0:04:04.440 --> 0:04:07.240 from when I started the effort of The first thing 0:04:07.440 --> 0:04:09.760 is that it has become very clear than the United 0:04:09.800 --> 0:04:12.880 States is the low cost producer of natural gas and 0:04:12.920 --> 0:04:16.320 at the same time the low cost manufacturer of liquid 0:04:16.320 --> 0:04:20.200 faction facilities. So we have a constan advantage compared to 0:04:20.200 --> 0:04:22.560 the rest of the countries in the world. The second 0:04:22.640 --> 0:04:25.200 very important thing that has happened is that the natural 0:04:25.240 --> 0:04:28.520 gas business on a global business is increasingly becoming a 0:04:28.600 --> 0:04:32.160 very liquid market, thanks in great part to liquid fu 0:04:32.279 --> 0:04:35.839 natural gas. So we the advent of Australia first and 0:04:35.839 --> 0:04:39.280 other United States has two major new players into the 0:04:39.400 --> 0:04:43.919 energy business. You now have twelve cargoes per day available 0:04:43.960 --> 0:04:47.640 for sale on a global basis, with about forty bcf 0:04:47.640 --> 0:04:50.760 a day and and by to see if you've got 0:04:50.760 --> 0:04:54.240 to tell people at the British thermal units in cubic 0:04:54.279 --> 0:04:57.240 feet cubic feet. So that's why we needed you, so 0:04:57.400 --> 0:05:04.000 to to put it in perspective, UM, the in two years, 0:05:04.040 --> 0:05:07.800 when old liquor faction facilities under construction currently will come 0:05:07.800 --> 0:05:10.800 on the market, the market will be able to produce 0:05:10.960 --> 0:05:15.000 fifty BCF fifty billion cubic feet of natural gas every day. 0:05:15.160 --> 0:05:18.040 The entire consumption of the United States is about seventy 0:05:18.040 --> 0:05:21.679 five billion cubic feet, so two thirds of the market 0:05:22.480 --> 0:05:24.760 on a global basis that is on the water at 0:05:24.760 --> 0:05:29.760 any given time. UH. It's two thirds of the size 0:05:29.880 --> 0:05:33.760 of the American market. It is larger than the European market. 0:05:34.160 --> 0:05:38.560 So it's a very very significant floating market that is 0:05:38.600 --> 0:05:41.880 extremely flexible in terms of what direction it can go into. 0:05:42.200 --> 0:05:45.640 Because those are allowed ships and there's probably two hundred 0:05:45.640 --> 0:05:49.400 and twenty of those today and in two years there'll 0:05:49.400 --> 0:05:53.080 be two hundred and fifty loaded with not liquefied natural gas. 0:05:53.120 --> 0:05:56.359 They can basically go to wherever they need it. And 0:05:56.480 --> 0:05:58.600 sure if just in our last minute or so here, 0:05:58.680 --> 0:06:03.239 where do you see prices for UH natural gas and 0:06:03.240 --> 0:06:06.000 and and liquid natural gas over the next five to 0:06:06.040 --> 0:06:08.720 ten years, Well, in the United States, I don't see 0:06:08.760 --> 0:06:11.400 anything different than what we have today. So some workedween 0:06:11.400 --> 0:06:13.839 two fifty and three donors in m MBTU. On a 0:06:13.839 --> 0:06:18.520 global basis, the the excess inventory is being solved very 0:06:18.640 --> 0:06:22.360 very very quickly because low prices generate new demand, so 0:06:22.520 --> 0:06:25.760 demand year on year for that liquid natural gasses up 0:06:27.560 --> 0:06:29.560 and on that basis, we're gonna have a very very 0:06:29.600 --> 0:06:33.719 tight system by two. Thank you. So I see higher 0:06:33.800 --> 0:06:37.960 prices for global prices very quickly, higher prices for global prices. 0:06:38.120 --> 0:06:40.080 Thank you very much for joining us. A pleasure. I 0:06:40.120 --> 0:06:41.880 look forward to having you again because we didn't even 0:06:41.920 --> 0:06:44.520 get into the whole kind of history of how the 0:06:44.600 --> 0:06:46.960 liquefied natural gas came about and also some of the 0:06:47.040 --> 0:06:50.600 challenges that you that you faced. Much appreciated for joining 0:06:50.640 --> 0:06:53.480 A shriek Tuki. He is the co founder and chairman 0:06:53.480 --> 0:07:09.039 of Tlaurean. Thank you very much. Our topic is the 0:07:09.080 --> 0:07:12.200 world of retail and joining us as Bert Flickinger. He 0:07:12.280 --> 0:07:15.560 is managing director Strategic Resource Group and he can be 0:07:15.600 --> 0:07:20.560 followed on Twitter at Bert Underscore Flickinger. Bert. Great to 0:07:20.600 --> 0:07:23.560 have you with us here in the studio. You know, uh, 0:07:23.600 --> 0:07:26.400 Peter Barnes is in our Bloomberg one oh six one 0:07:26.720 --> 0:07:30.360 studio in Boston, and maybe you could talk a little 0:07:30.360 --> 0:07:34.120 bit about the geographical issues that are facing retail because 0:07:34.160 --> 0:07:38.360 I was reading that in the support area of Boston, 0:07:38.440 --> 0:07:41.560 for example, it's attracted you. If you want to get 0:07:41.600 --> 0:07:45.200 retail space, you're gonna end up paying top dollar for that. 0:07:45.600 --> 0:07:47.400 But a lot of other places are not so hot. 0:07:47.480 --> 0:07:52.880 To give us the the lowdown precisely, pim Southport, South 0:07:52.880 --> 0:07:57.200 Street seaports just booming in terms of customer accounts. They 0:07:57.520 --> 0:07:59.960 got Primark from the UK, which is drawing a lot 0:08:00.000 --> 0:08:03.880 of customers. They're doing off price full line department stores. 0:08:04.240 --> 0:08:07.960 Sex Fifth Avenue downtown is one of the great Sex 0:08:08.000 --> 0:08:12.320 Fifth Avenue stores in Boston is really really one of 0:08:12.360 --> 0:08:17.280 the birthplaces of retail. Ben Camarada for t j X Incorporated. Um, 0:08:17.400 --> 0:08:20.800 are you taking me to Fi Leans basement too? But 0:08:21.280 --> 0:08:24.800 MRV wish to the great Chris Baldwin today at BJ's 0:08:24.800 --> 0:08:28.320 Wholesale Club and a lot of great retailers, George de 0:08:28.400 --> 0:08:31.000 Mulis and his Where where did all those great retailers go? 0:08:31.080 --> 0:08:34.120 Because we got the results all right, Michael Core's stock 0:08:34.200 --> 0:08:38.200 moves higher because they beat analyst estimates up like Ralph 0:08:38.280 --> 0:08:42.800 Lauren the same story. But Macy's, J C. Penny Nordstrom, 0:08:42.960 --> 0:08:47.120 Cole's what what kind of market are they facing? Tailor 0:08:47.160 --> 0:08:49.040 two cities Nord from is making a lot of on 0:08:49.240 --> 0:08:53.920 characteristic mistakes, similar to mistakes Target made in Canada, and 0:08:54.080 --> 0:08:59.079 Canada's turning around to be really tough for Nords of Penn. 0:08:59.440 --> 0:09:03.480 J C. Penny wins are Frank Blake Retailer Turnaround of 0:09:03.559 --> 0:09:06.160 the Year Award. Marvin Ellison is doing a great job 0:09:06.200 --> 0:09:08.920 with Steve set Off, former CEO of Sacks on the board, 0:09:10.000 --> 0:09:13.840 Mike Alman, who u cleaned up the company when Bill 0:09:13.880 --> 0:09:16.600 Ackman and Steve Roth left Penny on death store step 0:09:16.920 --> 0:09:20.680 Penny's got great apparel, great price points five seven nine 0:09:20.720 --> 0:09:24.680 dollars co exclusive with Disney Nike's coming in Adi DA. 0:09:24.760 --> 0:09:27.200 But Sophora is the real story at j C. Penny. 0:09:27.240 --> 0:09:31.840 When we were Paris, Sephora attracts more custos as many 0:09:31.920 --> 0:09:36.120 customers consumers as the Eiffel Tower and the Eiffel Towers 0:09:36.160 --> 0:09:39.040 opened more hours per day than Sephoras because they can't 0:09:39.040 --> 0:09:45.000 control the Saphour crowds on Shaunsliz Sophor Cosmetics for Cosmetics 0:09:45.000 --> 0:09:50.960 over six million customers a year. Sephora, Shawnsalise, Macy's is 0:09:51.040 --> 0:09:54.440 doing a lot of exciting things. So we're seeing this 0:09:54.520 --> 0:10:01.320 accelerating retail ice age consolidation where Barney's, Niemon Marcus Bergdorf 0:10:01.440 --> 0:10:05.760 could file for bankruptcy, Bonton Group, Macy with its blowing 0:10:05.840 --> 0:10:09.600 deal's company net consolidators as well, be Northstrom, as well 0:10:09.640 --> 0:10:13.240 be Hudson Bay Sacks. So while it's tougher time now, 0:10:13.280 --> 0:10:16.280 as you said, earnings up, sales soft, we see that 0:10:16.320 --> 0:10:18.400 bouncing back, but they really have to do what's for 0:10:18.679 --> 0:10:20.840 is doing so well in the UK when we're talking 0:10:20.880 --> 0:10:23.880 to one of their co directors, what so foreign Harvey 0:10:23.960 --> 0:10:27.680 Nichols are doing in London in terms of digital special 0:10:27.720 --> 0:10:32.320 exciting events to your present point before going on air, 0:10:32.760 --> 0:10:36.840 making clothes that people want to buy, great styles, great fabric, 0:10:37.520 --> 0:10:41.360 great fit. The leaders are really in London and people 0:10:41.440 --> 0:10:44.679 need to see that. And as you referenced, they're really 0:10:45.240 --> 0:10:49.680 really exciting development with young designers too. But Bert, if 0:10:49.880 --> 0:10:53.400 I'm a retail investor or even an institutional investor, should 0:10:53.440 --> 0:10:56.240 I just sit on the sidelines for now and wait 0:10:56.320 --> 0:11:00.880 until these these big big name company these like Macy's 0:11:00.920 --> 0:11:04.960 and Pennies and Nordstrom's get their act together. Peter, You're 0:11:04.960 --> 0:11:09.319 completely correct, sit on the sidelines until after Holiday seventeen. 0:11:09.800 --> 0:11:12.320 The bankruptcy will start when they have to pay their 0:11:12.360 --> 0:11:15.160 bills when the vendors don't fill up Tin Cup and 0:11:15.200 --> 0:11:19.400 Tin Cup Week in February of eighteen, and then Macy's 0:11:19.520 --> 0:11:22.600 and a number of the other son Nords from Hudson 0:11:22.600 --> 0:11:25.560 Bay Sachs will be the real winners. And that's probably 0:11:25.600 --> 0:11:29.439 the time to invest off off price. Anytimes a good time, 0:11:29.960 --> 0:11:33.920 uh particularly with t j Ax. Well I was gonna, well, 0:11:33.960 --> 0:11:35.920 go ahead, Peter. Well. I was also going to ask about, 0:11:35.920 --> 0:11:38.199 you know, any specialty retailers that you like. You know, 0:11:38.320 --> 0:11:41.000 I'm thinking about the foot lockers of the world, or 0:11:41.040 --> 0:11:44.320 the bed baths and beyond. How are they survive, how 0:11:44.320 --> 0:11:46.800 are they doing? Are they okay? And are they safe 0:11:46.800 --> 0:11:49.439 places for investors? These days they're okay, But it really 0:11:49.480 --> 0:11:53.440 depends on World World Cup and big athletic events in 0:11:53.640 --> 0:11:55.760 off price what we really like. There was an article 0:11:55.760 --> 0:11:58.320 in Barance this weekend that the dead on b JS 0:11:58.400 --> 0:12:01.560 is trading at nine and UH five eighths per cent. 0:12:02.600 --> 0:12:06.920 Dynamic new leader and Chris Baldwin and uh b J's 0:12:07.040 --> 0:12:11.600 in the entire southeast and northeastern seaboard of the US 0:12:11.880 --> 0:12:15.640 is really doing well and saving customers money, both individual 0:12:15.720 --> 0:12:19.240 as well since institutional or commercial customers. Well, since you 0:12:19.320 --> 0:12:22.920 mentioned wholesale clubs, I gotta ask you about Costco because 0:12:22.960 --> 0:12:25.400 I mean that is the you know, that's the leader, right, 0:12:25.679 --> 0:12:29.600 Costco is the leader. Lost Jeff Bradman, who was even 0:12:29.679 --> 0:12:33.440 better than Sam Walton in terms of everything Jeff Bradman 0:12:33.520 --> 0:12:35.760 and his dad did was a winner. They betted a 0:12:35.800 --> 0:12:40.560 thousand in retail save families at Costco UH five six 0:12:40.600 --> 0:12:44.560 thousand a year. During the supermarket strike the last decade, 0:12:44.880 --> 0:12:49.160 Brotman would let about eight to ten Latino families when 0:12:49.160 --> 0:12:51.640 we were in the market sign up on one Costco 0:12:51.720 --> 0:12:55.280 membership card. They couldn't shop in the neighborhood supermarkets. Costco 0:12:55.440 --> 0:12:59.200 has has stores that do up to five six million 0:12:59.240 --> 0:13:01.959 a week high volume stores anywhere outside our pack and 0:13:02.000 --> 0:13:07.040 save client in New Zealand and UH. Costco can beat 0:13:07.080 --> 0:13:10.280 anybody and anything. And my former Procter and Gamble teammate 0:13:10.360 --> 0:13:12.800 Mike Parrott's doing a great job as their chief merchant. 0:13:13.480 --> 0:13:17.480 Hey Bert, Let's finish up though on with the online retailers. 0:13:17.520 --> 0:13:21.840 You know, where do these companies hide in the face 0:13:21.880 --> 0:13:26.439 of competition from Amazon, I mean, can they survive? Uh? 0:13:26.679 --> 0:13:30.360 Even the well costco has its special niche obviously, but 0:13:30.400 --> 0:13:32.720 what about the rest of these retailers. How do they 0:13:32.760 --> 0:13:35.679 how do they compete against the Amazons of the world. 0:13:36.040 --> 0:13:38.760 I'm gonna I'm gonna channel Peter. To Macy's credit, they 0:13:38.840 --> 0:13:41.920 moved from the twentieth largest online retailer. Macy's dot com 0:13:42.000 --> 0:13:44.960 is now ranked number seven in retail Richard Baker and 0:13:45.000 --> 0:13:48.520 his team at Hudson Babe but guilt in off price 0:13:48.880 --> 0:13:51.800 for sex fifth avenue and sex says off fiveth. So 0:13:51.840 --> 0:13:54.440 a combination of bricks and clicks with I'm your channel's 0:13:54.840 --> 0:13:57.720 great way to survive. But you're you're right, there's gonna 0:13:57.720 --> 0:14:00.240 be darwinning destruction for the people that don't to it 0:14:01.320 --> 0:14:05.080 ouch Darwinnie and destruction. You know, everybody, Let me just 0:14:05.120 --> 0:14:06.720 focus on Walmart. I know we did. You know we 0:14:06.720 --> 0:14:09.319 talked a little bit of Amazon. Walmart is serious about 0:14:09.360 --> 0:14:12.640 online right very stock is up eight eight for Walmart 0:14:12.640 --> 0:14:14.840 stock is up eighteen percent so far this year. They 0:14:14.840 --> 0:14:17.280 pay a two and a half percent dividend and they're 0:14:17.280 --> 0:14:20.360 not going quietly into the night. Not going quietly, and 0:14:20.400 --> 0:14:24.120 it might be a Peter Barnes good good investment for now. 0:14:24.160 --> 0:14:27.440 In eighteen Doug McMillan hand picked from Mr Sam Walton 0:14:27.480 --> 0:14:31.720 out of Jonesboro, Arkansas. Uh, one of the first person 0:14:31.800 --> 0:14:36.240 in seventeen years, Pim and Peter top merchant top store operators, 0:14:36.280 --> 0:14:40.920 completely turning the company around. What and Walmart had a 0:14:40.920 --> 0:14:44.480 lot of nepotism with Sam Walton's son Robbed and brother 0:14:44.520 --> 0:14:47.600 in law running dot com. Now they have professionals running it, 0:14:47.680 --> 0:14:50.920 and Walmart will win on land and online. All right, 0:14:50.960 --> 0:14:52.960 I gotta tell you, I think sometimes my wife is 0:14:53.000 --> 0:14:55.960 single handedly helping to keep t J Max and Walmart 0:14:56.080 --> 0:14:58.720 up there because she's that those places all the time. 0:14:59.480 --> 0:15:02.520 Your wife as smart as their summer interns of Goodbye Anywhere, 0:15:02.520 --> 0:15:05.080 and they find the best fashions for for ten dollars. 0:15:05.120 --> 0:15:08.720 This is your great producer, does uh? Sam Lang best 0:15:08.720 --> 0:15:12.320 bargain's best prices. Peter, thanks very much. Bert Flickinger is 0:15:12.360 --> 0:15:16.000 managing director Strategic Resource Group, and I want to thank 0:15:16.040 --> 0:15:31.160 of course Peter Barnes, my guest host today. Let's turn 0:15:31.200 --> 0:15:33.800 our attention now to yield. How do you get yield 0:15:33.800 --> 0:15:36.760 in the yield starved environment? For example, the thirty year 0:15:36.840 --> 0:15:39.920 right now pays two point seven nine the ten year 0:15:40.120 --> 0:15:42.840 pays well, it doesn't pay very much more pace two 0:15:42.880 --> 0:15:46.520 point to one percent. And for people that are looking 0:15:46.560 --> 0:15:49.680 for yield, where are they gonna go? Well, maybe they're 0:15:49.680 --> 0:15:52.600 gonna stop in Joel Beam's office. He's managing director senior 0:15:52.640 --> 0:15:56.560 portfolio manager at Salient and the topic is real estate 0:15:56.640 --> 0:15:59.120 investment trust. Joel, thank you very much for being with us, 0:15:59.120 --> 0:16:01.280 Thanks for having me give us the lay of the 0:16:01.360 --> 0:16:03.680 land when it comes to real estate investment trust. Because 0:16:03.720 --> 0:16:07.080 we know that the income gets passed through untaxed to 0:16:07.320 --> 0:16:11.480 the recipient, and the recipient pays the tax. But there 0:16:11.520 --> 0:16:14.840 are a wide variety of reeds out there. Give us 0:16:14.880 --> 0:16:18.640 some some understanding. Indeed, it's a trillion dollar market cap 0:16:18.680 --> 0:16:23.760 and the the property exposure that's possible to access through 0:16:23.800 --> 0:16:26.400 this marketplace is quite diverse, and it really reflects the 0:16:26.400 --> 0:16:32.080 main street property markets. So there are shopping centers, office buildings, warehouses, 0:16:32.560 --> 0:16:37.280 specialty um reachs like things that an't like prisons for instance. 0:16:37.320 --> 0:16:39.760 I mean, there's all manner of commercial property available in 0:16:39.800 --> 0:16:42.320 that trillion dollar market. What what do you specialize in 0:16:42.400 --> 0:16:45.880 or what what do you recommending that people pay attention to? Currently, 0:16:46.320 --> 0:16:48.840 we pay attention to the main food groups. So you 0:16:48.880 --> 0:16:54.200 know it's largely it's it's uh industrial property, office property, UM, 0:16:54.360 --> 0:16:58.960 retail hotels, so fairly standard fare um for us, and 0:16:59.000 --> 0:17:01.600 I think right now they're there's you know, actually there's 0:17:01.640 --> 0:17:03.880 quite a lot of dispersion that's come back into our market. 0:17:03.920 --> 0:17:06.199 I mean, the prices have generally been a little bit 0:17:06.240 --> 0:17:08.440 homogeneous over the last few years, and this year is 0:17:08.480 --> 0:17:10.719 particularly with the retail sector you see getting knocked out 0:17:10.720 --> 0:17:13.720 of bed. It's um, it's been a really interesting opportunity 0:17:13.760 --> 0:17:16.800 to pick up some stock. And Joe Peter here in Boston, 0:17:17.240 --> 0:17:20.640 you do right, and your most recent research note though 0:17:20.680 --> 0:17:23.800 that people have to be really careful about the you know, 0:17:23.920 --> 0:17:27.439 chasing yield here. Uh, you have to be kind of 0:17:27.480 --> 0:17:32.399 selective can expand on that and so what what is 0:17:32.440 --> 0:17:35.840 the risk right now in the reach space? Well, there's 0:17:35.840 --> 0:17:39.199 always risk, um, this is nothing is riskless. And UM, 0:17:39.240 --> 0:17:43.120 you know our our sector you know, certainly has some yield. 0:17:43.160 --> 0:17:46.639 The stocks that trade at lower multiples and you know, um, 0:17:46.760 --> 0:17:48.840 you know, I have a greater opportunity to get more 0:17:48.880 --> 0:17:51.040 of your return and current yield and less in growth. 0:17:51.880 --> 0:17:56.480 And if you um aren't careful, you know, sometimes you 0:17:56.480 --> 0:17:58.640 can get exposed to companies that might have a dividend cut, 0:17:58.640 --> 0:18:01.320 maybe they're overpaying. So you know, we all want yield, 0:18:01.560 --> 0:18:03.760 but remember you can't We can't give you, and you 0:18:03.840 --> 0:18:06.800 can't find what the Earth doesn't provide. And we are 0:18:06.880 --> 0:18:10.600 in a low yield environment across the investment landscape, so 0:18:10.720 --> 0:18:14.040 one must always be careful. And um, you know that's 0:18:14.080 --> 0:18:16.760 my short advice somewhere. Yeah, and as with metals, which 0:18:16.560 --> 0:18:19.360 we were just talking about in the last segment, Um, 0:18:19.720 --> 0:18:22.800 your space is very interest rate sensitive and and we 0:18:22.880 --> 0:18:26.320 have the Fed placed yet again to raise interest rates 0:18:26.520 --> 0:18:29.040 potentially by the end of the year. How does that 0:18:29.080 --> 0:18:32.080 play into all this? Well, long term real estate shouldn't 0:18:32.119 --> 0:18:35.200 and doesn't really correlate with rate changes except that right now, 0:18:35.800 --> 0:18:38.399 you know, we're living in an extraordinary time where the 0:18:38.560 --> 0:18:41.800 entire investment landscape seems to be priced at a premium, 0:18:41.880 --> 0:18:45.280 so as the overall return landscape moves, and that's primarily 0:18:45.400 --> 0:18:48.800 risk free rates. Right, Um, there are certain sectors that 0:18:48.880 --> 0:18:51.200 might be susceptible to it from a you know, from 0:18:51.240 --> 0:18:53.200 a buying and selling in the markets every day point 0:18:53.240 --> 0:18:56.160 of view. Long term, Um, you know, a bond can't 0:18:56.200 --> 0:18:58.600 raise the rent um, like we can say on a 0:18:58.680 --> 0:19:01.840 commercial property that we own. So so there isn't correlation 0:19:01.880 --> 0:19:04.480 over the long term, but it's extremely important right now 0:19:04.720 --> 0:19:07.320 where it seems well established that many things are expensive, 0:19:07.640 --> 0:19:10.960 it's important to have a strategy. Um, you know, I 0:19:11.000 --> 0:19:13.880 think the passive fad in today's environment is way long 0:19:13.920 --> 0:19:17.120 in the tooth. Can you speak about one particular read 0:19:17.240 --> 0:19:22.800 at all, Chatham Lodging Trust. They're based in Palm Beach, Florida, 0:19:22.920 --> 0:19:24.679 and I think that they kind of quality. I mean, 0:19:24.720 --> 0:19:27.679 I know they're in your fund, but there are a 0:19:27.840 --> 0:19:31.760 read that's focused on the hospitality industry. Yeah, we think 0:19:31.760 --> 0:19:33.919 it's a great company that's been a little bit choppy, 0:19:34.280 --> 0:19:36.879 you know, performance wise, but the business is plotting along. 0:19:37.480 --> 0:19:40.000 In our in our strategies, we try to have our 0:19:40.040 --> 0:19:43.399 common stock hotel investments with limited service hotels because the 0:19:43.440 --> 0:19:46.680 margins are better. Um so, you know, really great brands 0:19:46.720 --> 0:19:50.199 like like Marriott Residents In and Hilton Garden In. You know, 0:19:50.280 --> 0:19:54.439 really nice margins, great business. And in our more credit 0:19:54.680 --> 0:19:57.840 oriented investments, we like we like more full service hotels, 0:19:57.840 --> 0:20:00.400 like we have a big investment in Ashford hospit Mentality 0:20:00.480 --> 0:20:02.840 Prime that you probably saw just to quickly. I just 0:20:02.840 --> 0:20:06.520 said like that the dividend the yield on on Chatham 0:20:06.840 --> 0:20:10.600 Lodging Trust symbol is c l dt uh six and 0:20:10.640 --> 0:20:16.160 a half percent. Right now, Peter and Joel, you are 0:20:16.280 --> 0:20:19.480 looking at harvesting some gains here, are you not? We 0:20:19.560 --> 0:20:22.680 do that all the time, sir, so so what but 0:20:22.680 --> 0:20:28.680 but specifically you're talking about harvesting gains and preferreds. Why? Well, 0:20:28.720 --> 0:20:30.760 I think it's as I mentioned earlier, it seems well 0:20:30.880 --> 0:20:33.520 established in the credit space, in particular that you know, 0:20:33.640 --> 0:20:36.040 valuations are elevated and there seems to be you know, 0:20:36.119 --> 0:20:39.320 really more you know, really more downside risk than than 0:20:39.400 --> 0:20:41.879 upside opportunity for a lot of credit instruments. So we 0:20:41.920 --> 0:20:44.719 are absolutely for years have been in block and tackle 0:20:44.760 --> 0:20:47.760 mode sort of selling low yield where there's no more 0:20:47.840 --> 0:20:49.960 upside in the price, and we've been trying to source 0:20:50.000 --> 0:20:53.159 and buy opportunities for you know, a fair return and 0:20:53.359 --> 0:20:56.840 some price stability and and upside. I want to thank 0:20:56.840 --> 0:20:58.960 you very much for spending time of this coming in 0:20:58.960 --> 0:21:01.560 a very interesting Joel Beam is a managing director senior 0:21:01.560 --> 0:21:05.240 portfolio manager at Salient. The topic of course is reets 0:21:05.720 --> 0:21:09.520 and just to mention that they manage the salient reats strategy. 0:21:09.560 --> 0:21:24.280 It's called the Select Income Fund. Joining us is Eric Lacel. 0:21:24.359 --> 0:21:27.520 He is the chief economist for URBC Global Asset Management. 0:21:27.560 --> 0:21:31.360 They've got a mirror three billion dollars under management and 0:21:31.680 --> 0:21:35.439 joining us from Toronto. And you know, Eric, maybe you 0:21:35.440 --> 0:21:37.959 could give us a sort of non US perspective of 0:21:37.960 --> 0:21:42.199 how the US economy looks to you and what is 0:21:42.400 --> 0:21:44.639 it's uh, what are some of its strengths and some 0:21:44.760 --> 0:21:48.080 of its weaknesses at the moment, Well, thanks for having 0:21:48.119 --> 0:21:51.080 me to to me, it looks like it's doing pretty well. 0:21:51.200 --> 0:21:55.119 I won't say it's necessarily broken, unambiguously clear of that 0:21:55.200 --> 0:21:57.399 two percent to hurdle that has proven so hard to 0:21:57.440 --> 0:22:00.040 overcome over the last eight or nine years, but is 0:22:00.040 --> 0:22:02.000 an economy running towards the top end. I think of 0:22:02.040 --> 0:22:03.960 what we've grown used to and you can see that 0:22:04.000 --> 0:22:06.800 demonstrated in quite a lot of measures. Granted, the hard 0:22:06.880 --> 0:22:09.880 data maybe not quite performing online with the soft data, 0:22:09.920 --> 0:22:11.639 but overall it looks like there's been a pickup. I 0:22:11.680 --> 0:22:13.720 don't know if we can attribute all of that back 0:22:13.960 --> 0:22:16.600 to the election in November, just because there's a global 0:22:16.640 --> 0:22:18.520 element to this, and there's a part of it that 0:22:18.600 --> 0:22:21.560 started way back last summer. But I would say moving 0:22:21.600 --> 0:22:23.560 fairly well right now. And I should say, as as 0:22:23.600 --> 0:22:25.400 someone living to the north of the U. S. It's 0:22:25.440 --> 0:22:27.640 something that's been beneficial to Canada as well. It's helped 0:22:27.640 --> 0:22:31.360 Canada move quite nicely forward to but Erica Peter Barnes here, 0:22:31.920 --> 0:22:35.760 a lot of the rise in the equity markets has 0:22:35.840 --> 0:22:39.840 been attributed to the expectation that the new president's agenda 0:22:40.320 --> 0:22:43.560 will get past and we'll help to stimulate the economy 0:22:43.680 --> 0:22:47.520 even more if if if that, assuming that's what it needs. 0:22:47.560 --> 0:22:51.520 But we haven't actually seen much of that agenda move forward, 0:22:51.520 --> 0:22:53.000 and it looks like the markets are really kind of 0:22:53.000 --> 0:22:55.840 hanging on tax reform. What about all that? Right Well, 0:22:55.920 --> 0:22:58.119 I think that's absolutely fair, and I'll circle around to 0:22:58.119 --> 0:22:59.480 that in a moment, but I would really make the 0:22:59.520 --> 0:23:02.000 comment at same time that do keep in mind there 0:23:02.000 --> 0:23:04.360 are some other things that work here. If financial conditions 0:23:04.359 --> 0:23:06.639 in general are very favorable. There's a bit of a 0:23:07.000 --> 0:23:09.360 rubber ball bounce effect from a tough start to two 0:23:09.400 --> 0:23:12.040 thousand sixteen and so on, So there are other things 0:23:12.040 --> 0:23:14.880 that work. I would say that what's maybe underappreciated by 0:23:14.880 --> 0:23:17.480 the White House legacy. If I can say that so 0:23:17.560 --> 0:23:19.520 far is there does seem to be a shift in 0:23:19.560 --> 0:23:22.359 the deregulation environment. Not a lot of legislation, but a 0:23:22.359 --> 0:23:24.960 lot of executive orders. They could change in terms of 0:23:25.000 --> 0:23:27.639