1 00:00:00,000 --> 00:00:03,600 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer on 2 00:00:03,760 --> 00:00:06,800 Speaker 1: Bloomberg Radio. All right, everybody, we've got um a cool 3 00:00:06,800 --> 00:00:09,600 Speaker 1: sixty minutes coming your way to areas that have definitely 4 00:00:09,600 --> 00:00:12,080 Speaker 1: been impacted when it comes to COVID nineteen. We're talking 5 00:00:12,080 --> 00:00:14,240 Speaker 1: about real estate and also retail. We'll get to retail 6 00:00:14,280 --> 00:00:16,720 Speaker 1: a little bit later on, but first up, I do 7 00:00:16,760 --> 00:00:18,720 Speaker 1: want to talk a little bit about real estate. Check 8 00:00:18,760 --> 00:00:21,960 Speaker 1: out the Bloomberg Barkley's Reat Index. It's done about eight 9 00:00:21,960 --> 00:00:24,919 Speaker 1: percent so far this year. We know the real estate 10 00:00:24,960 --> 00:00:27,920 Speaker 1: industry is grappling with people moving out of cities, working 11 00:00:27,960 --> 00:00:31,040 Speaker 1: from home, increases in demand for distribution centers and more. 12 00:00:31,120 --> 00:00:34,280 Speaker 1: There is a lot of churn. If you will so 13 00:00:34,400 --> 00:00:36,400 Speaker 1: timely to have back with us. Scott crow He is 14 00:00:36,720 --> 00:00:40,920 Speaker 1: managing director and chief investment Strategist at Center Square Investment Management. 15 00:00:41,000 --> 00:00:44,639 Speaker 1: It's a global investment manager focusing on actively managed real 16 00:00:44,760 --> 00:00:48,519 Speaker 1: estate and infrastructure strategies and they manage, according to their website, 17 00:00:48,560 --> 00:00:52,360 Speaker 1: roughly eleven bill lead in assets for institutional and private investors. 18 00:00:52,640 --> 00:00:55,480 Speaker 1: And Scott joins us on the phone on this Tuesday, 19 00:00:55,520 --> 00:00:58,920 Speaker 1: and I believe you're in Philadelphia, Is that right? I 20 00:00:58,960 --> 00:01:00,880 Speaker 1: guess that's we're in base. Take Carol. Good to be 21 00:01:01,000 --> 00:01:03,400 Speaker 1: with you again. Yeah, great to have you here. How 22 00:01:03,440 --> 00:01:06,679 Speaker 1: are you? I've think good. It's been a while. Lot's 23 00:01:06,720 --> 00:01:09,320 Speaker 1: happened since we last spoke, and it's had had a 24 00:01:09,400 --> 00:01:13,440 Speaker 1: lot of ramifications for real estate, because real estate that 25 00:01:13,520 --> 00:01:17,000 Speaker 1: it's hard is you know where people meet, congregate and 26 00:01:17,080 --> 00:01:18,880 Speaker 1: you know, how how are you? Things that have happened 27 00:01:18,920 --> 00:01:21,319 Speaker 1: in the world, and a lot of that's changed, some 28 00:01:21,440 --> 00:01:23,800 Speaker 1: of it, you know, temporary, some of it probably permanent. 29 00:01:24,000 --> 00:01:25,679 Speaker 1: Well let's get into that, Scott, what do you think 30 00:01:25,720 --> 00:01:27,800 Speaker 1: is temporary? Like, let me throw something at you. Working 31 00:01:27,880 --> 00:01:30,679 Speaker 1: from home temporary or it's going to be around forever 32 00:01:30,800 --> 00:01:33,720 Speaker 1: or at least for a long time. Alright, both. Right, 33 00:01:33,800 --> 00:01:37,400 Speaker 1: So here's the stat um prior to COVID, the average 34 00:01:37,440 --> 00:01:40,759 Speaker 1: utilization of an office asset. There's four point six days 35 00:01:40,760 --> 00:01:43,160 Speaker 1: out of five a week right now. Right now it 36 00:01:43,200 --> 00:01:45,040 Speaker 1: can be down to like one one and a half. 37 00:01:45,120 --> 00:01:48,880 Speaker 1: And where where does that end up sort of post COVID, 38 00:01:48,960 --> 00:01:52,360 Speaker 1: post vaccine um. It's probably somewhere in the middle three 39 00:01:52,360 --> 00:01:54,320 Speaker 1: to I would say, three to four days a week. 40 00:01:54,400 --> 00:01:59,400 Speaker 1: And the reason for that is that what COVID's forced 41 00:01:59,440 --> 00:02:01,800 Speaker 1: us to do is pick up and utilize a lot 42 00:02:01,840 --> 00:02:05,360 Speaker 1: of technologies that we've we've had in the past, but 43 00:02:05,520 --> 00:02:09,799 Speaker 1: haven't been forced to use and really explore. And it's 44 00:02:09,880 --> 00:02:13,440 Speaker 1: also broken down some social norms as it relates to 45 00:02:13,520 --> 00:02:16,920 Speaker 1: sort of zooming it in or calling it in um 46 00:02:17,120 --> 00:02:19,320 Speaker 1: And so I think some of those habits are gonna 47 00:02:19,440 --> 00:02:22,040 Speaker 1: stick because what we've learned is that we can be 48 00:02:22,120 --> 00:02:25,200 Speaker 1: efficient working from home and there may be a different balance. 49 00:02:25,800 --> 00:02:29,440 Speaker 1: And so that doesn't mean office is you know, obsolete, 50 00:02:29,639 --> 00:02:33,040 Speaker 1: but it does mean that it probably translates to a 51 00:02:33,160 --> 00:02:38,080 Speaker 1: call at demn shock to office demand and that is 52 00:02:38,120 --> 00:02:44,040 Speaker 1: going to have ramifications for office, particularly older stock, on 53 00:02:44,080 --> 00:02:48,080 Speaker 1: a permanent basis. And I think what's more temporary is 54 00:02:48,400 --> 00:02:51,560 Speaker 1: you know, the shutdown of major urban centers like you know, 55 00:02:51,639 --> 00:02:56,200 Speaker 1: New York and San Francisco and other places. Because I 56 00:02:56,320 --> 00:02:59,840 Speaker 1: say that because the big pain point there is a 57 00:03:00,000 --> 00:03:02,720 Speaker 1: a less the density of the office. It's a density 58 00:03:02,800 --> 00:03:06,280 Speaker 1: of the transportation like m T A ridership is tracking 59 00:03:06,280 --> 00:03:09,360 Speaker 1: about what it was a year ago, for instance, and 60 00:03:09,520 --> 00:03:11,359 Speaker 1: that's the thing we've got to solve, and we'll probably 61 00:03:11,360 --> 00:03:13,560 Speaker 1: solve it in the next bit of six and twelve months. Yeah, 62 00:03:13,560 --> 00:03:15,160 Speaker 1: because I have to say. We just did the Blueberg 63 00:03:15,160 --> 00:03:17,320 Speaker 1: New Economy Forum and one of the things we talked about, 64 00:03:17,320 --> 00:03:19,239 Speaker 1: one of the pillars is city isn't. Just had a 65 00:03:19,240 --> 00:03:21,919 Speaker 1: whole day of conversations about that, and you know, one 66 00:03:21,919 --> 00:03:23,800 Speaker 1: of the things that came up was that concept of 67 00:03:23,840 --> 00:03:27,760 Speaker 1: fifteen minute cities where basically you're in a major urban 68 00:03:27,800 --> 00:03:29,280 Speaker 1: area and you can get to everything you need in 69 00:03:29,320 --> 00:03:32,679 Speaker 1: fifteen minutes. And you know, people people, and we've talked 70 00:03:32,680 --> 00:03:36,000 Speaker 1: about demise of cities before. People love cities. I love 71 00:03:36,040 --> 00:03:38,520 Speaker 1: a city. My daughter, who is a seventeen year old, 72 00:03:38,760 --> 00:03:40,480 Speaker 1: loves the city and plans to go, you know, that's 73 00:03:40,480 --> 00:03:43,240 Speaker 1: where she wants to ultimately live. So I feel like 74 00:03:43,320 --> 00:03:47,280 Speaker 1: that pushback against cities, um, you know, we've heard it 75 00:03:47,280 --> 00:03:49,920 Speaker 1: before and it's not going to happen. But that doesn't 76 00:03:49,960 --> 00:03:52,960 Speaker 1: mean the way we use our urban space doesn't change, 77 00:03:53,880 --> 00:03:56,600 Speaker 1: right absolutely, And look, you know, the death of cities 78 00:03:56,680 --> 00:03:58,440 Speaker 1: is being you know, talked about, as you said, for 79 00:03:58,480 --> 00:04:00,480 Speaker 1: a long time. Look think about it. You cities have 80 00:04:00,600 --> 00:04:04,560 Speaker 1: gone through riots and plagues and wars and over the 81 00:04:04,640 --> 00:04:07,560 Speaker 1: eons and they've always come back to you not only 82 00:04:07,600 --> 00:04:10,800 Speaker 1: come back, but they've become more relatively important and what 83 00:04:10,920 --> 00:04:14,960 Speaker 1: does that matter. Well, density is convenient, it's fine, it's exciting, 84 00:04:15,040 --> 00:04:19,719 Speaker 1: but it's also efficient and productive. But you know, COVID 85 00:04:19,760 --> 00:04:21,880 Speaker 1: is the enemy of density for now right, which is 86 00:04:21,920 --> 00:04:25,240 Speaker 1: why those cities have been hit so hard. But interestingly, 87 00:04:25,320 --> 00:04:28,480 Speaker 1: if you look at the apartment space in Manhattan as 88 00:04:28,520 --> 00:04:33,120 Speaker 1: a very good leading indicator, look rents it down on 89 00:04:33,200 --> 00:04:37,080 Speaker 1: the year, Um, you know, uh, concessions of increased. But 90 00:04:37,120 --> 00:04:39,800 Speaker 1: we've already seen about a thirty percent for the month 91 00:04:39,880 --> 00:04:45,880 Speaker 1: of October at increase in applications for apartments in Manhattan. 92 00:04:46,320 --> 00:04:50,160 Speaker 1: And as you're alluding to before with your daughter, the 93 00:04:51,440 --> 00:04:55,279 Speaker 1: people that are coming back the soonest are the young people, 94 00:04:55,880 --> 00:04:59,040 Speaker 1: and they're they're taking a bite of the apple pun intended, 95 00:04:59,480 --> 00:05:03,000 Speaker 1: and you know, nibbling back at New York because they 96 00:05:03,040 --> 00:05:05,839 Speaker 1: would rather live there. There are more people that want 97 00:05:05,880 --> 00:05:08,040 Speaker 1: to live in New York in their apartments. And as 98 00:05:08,040 --> 00:05:10,840 Speaker 1: the prices of fallen, people are already starting to look 99 00:05:10,880 --> 00:05:14,520 Speaker 1: through the winter and and least space. So what does 100 00:05:14,560 --> 00:05:16,520 Speaker 1: it mean that for office space? So the do the 101 00:05:16,560 --> 00:05:19,360 Speaker 1: older buildings. We had a story about New York where 102 00:05:19,360 --> 00:05:23,080 Speaker 1: they were thinking about summer office buildings in Midtown repurposing 103 00:05:23,120 --> 00:05:26,560 Speaker 1: it into apartments essentially like what happened to that office 104 00:05:26,560 --> 00:05:31,080 Speaker 1: space cut. Well, one of the things that we've been 105 00:05:31,120 --> 00:05:35,280 Speaker 1: avoiding at Center Square is older office stock because and 106 00:05:35,320 --> 00:05:38,600 Speaker 1: it's generally true across most real estate types of to day, 107 00:05:38,640 --> 00:05:41,719 Speaker 1: the way we we live, work, and play, the impact 108 00:05:41,800 --> 00:05:46,599 Speaker 1: of technology, demographics, preferences means that the functionality of real estate, 109 00:05:46,640 --> 00:05:48,760 Speaker 1: the way we use it and valued has really changed. 110 00:05:48,800 --> 00:05:52,479 Speaker 1: And it's very hard for old stock to compete in 111 00:05:52,560 --> 00:05:56,000 Speaker 1: any sector, but particularly in office. And there's only so 112 00:05:56,120 --> 00:05:59,120 Speaker 1: much you can do to an older office asset to 113 00:05:59,160 --> 00:06:02,560 Speaker 1: bring it up to end it into a modern standard. 114 00:06:02,640 --> 00:06:04,479 Speaker 1: And so you know, a lot of that if it 115 00:06:04,520 --> 00:06:07,480 Speaker 1: could be converted to residential, would be fantastic. There's a 116 00:06:07,600 --> 00:06:10,480 Speaker 1: huge delta in terms of dollar per square foot between 117 00:06:10,520 --> 00:06:14,760 Speaker 1: the value of residential and office in the favor of residential. 118 00:06:15,440 --> 00:06:17,160 Speaker 1: But that's going to take a lot of a lot 119 00:06:17,200 --> 00:06:20,279 Speaker 1: of time, you know, with the planning departments and and 120 00:06:20,279 --> 00:06:23,080 Speaker 1: and getting the right entitlements. So we'll have to see 121 00:06:23,080 --> 00:06:25,240 Speaker 1: I think it has to become probably empty for a 122 00:06:25,279 --> 00:06:28,120 Speaker 1: while and a bit of an issue, and then you'll 123 00:06:28,120 --> 00:06:31,680 Speaker 1: see planning laws change and it be able to be repurposed. 124 00:06:31,720 --> 00:06:33,839 Speaker 1: I mean, similar argument you can make for the mall space. 125 00:06:34,279 --> 00:06:37,000 Speaker 1: Talk to us about cold storage because I think, you know, 126 00:06:37,160 --> 00:06:39,440 Speaker 1: we are watching what's going on with the COVID nineteen 127 00:06:39,520 --> 00:06:41,920 Speaker 1: vaccine and thinking about and we've done the stories about 128 00:06:41,960 --> 00:06:45,320 Speaker 1: the logistics, the infrastructure, everything that's needed to make sure 129 00:06:45,360 --> 00:06:47,200 Speaker 1: that that vaccine gets out to the people who need 130 00:06:47,200 --> 00:06:50,880 Speaker 1: it around the globe. Well culture is a great example 131 00:06:50,920 --> 00:06:53,080 Speaker 1: of I think things that I was just listening to us. 132 00:06:53,080 --> 00:06:55,440 Speaker 1: You're talking to Charlie talking about your time at ups 133 00:06:55,520 --> 00:06:57,800 Speaker 1: and the way that we're all getting stuff at home. 134 00:06:57,880 --> 00:07:00,560 Speaker 1: The fact that stocks are uh are up on the 135 00:07:00,600 --> 00:07:04,599 Speaker 1: back of everyone buying new PCs and upgrading their hard workers. 136 00:07:04,640 --> 00:07:08,520 Speaker 1: They're working from home, and this is basically just highlighting 137 00:07:08,520 --> 00:07:11,560 Speaker 1: the fact that these knee sectors like cold storage, industrial 138 00:07:11,560 --> 00:07:14,440 Speaker 1: warehouse distribution, even things like data centers and cell towels, 139 00:07:14,440 --> 00:07:17,800 Speaker 1: which are basically the physical infrastructure fueling all this ability 140 00:07:17,840 --> 00:07:20,360 Speaker 1: to work from home is really where the actions at 141 00:07:20,400 --> 00:07:23,240 Speaker 1: in the real estate market. And so we've been responding 142 00:07:23,280 --> 00:07:25,280 Speaker 1: to that as our clients have looked to shift away 143 00:07:25,320 --> 00:07:29,240 Speaker 1: from traditional asset classes like retail and office towards these 144 00:07:29,320 --> 00:07:31,800 Speaker 1: knee sectors, and one of them is cold storage. In fact, 145 00:07:31,840 --> 00:07:34,640 Speaker 1: We just made at a hundred sixty million dollar investment 146 00:07:34,800 --> 00:07:38,760 Speaker 1: in Lineage. It's the largest private operator of cold storage 147 00:07:38,840 --> 00:07:41,120 Speaker 1: United States. And why do we do that? Well, there's 148 00:07:41,160 --> 00:07:44,160 Speaker 1: there's It wasn't just vaccine related. The first reason is 149 00:07:44,200 --> 00:07:48,400 Speaker 1: that as we become more affluent, we are ingesting more 150 00:07:48,440 --> 00:07:54,640 Speaker 1: fresh goods and less process dried and can goods. And yeah, 151 00:07:54,800 --> 00:07:57,600 Speaker 1: so you know, whether it's at a restaurant or at 152 00:07:57,640 --> 00:08:01,200 Speaker 1: home right reading, more fresh and a cold storage assets 153 00:08:01,240 --> 00:08:03,640 Speaker 1: basically a huge fridge with a freezer at the back 154 00:08:03,640 --> 00:08:06,280 Speaker 1: and a fridge at the front. And why that's become 155 00:08:06,320 --> 00:08:08,720 Speaker 1: even more interesting now with COVID is how do we 156 00:08:08,840 --> 00:08:13,160 Speaker 1: distribute hundreds of millions of vaccines to people around the 157 00:08:13,240 --> 00:08:15,680 Speaker 1: United States? And the answer is probably going to be 158 00:08:15,720 --> 00:08:17,760 Speaker 1: the same way we get our ice cream, which is 159 00:08:17,840 --> 00:08:20,120 Speaker 1: through those cold storage assets. So this is going to 160 00:08:20,160 --> 00:08:23,800 Speaker 1: become a very important part of the logistics of curing COVID. 161 00:08:24,040 --> 00:08:26,560 Speaker 1: What's the infrastructure when it comes to cold storage? Right now? 162 00:08:26,560 --> 00:08:32,280 Speaker 1: How behind are we? Well we are, We're we're catching up. 163 00:08:32,320 --> 00:08:36,200 Speaker 1: I mean, Lineage and others have been developing these assets 164 00:08:36,240 --> 00:08:39,200 Speaker 1: now for you know, for decades. The big game has 165 00:08:39,280 --> 00:08:43,400 Speaker 1: been changing how efficient we run these assets, and that's 166 00:08:43,440 --> 00:08:46,480 Speaker 1: really come down to the use of technology and the 167 00:08:46,520 --> 00:08:49,480 Speaker 1: ability to run these assets very efficiently. But it has 168 00:08:49,600 --> 00:08:53,120 Speaker 1: necessitated quietly in the background as we've been building out 169 00:08:53,200 --> 00:08:56,640 Speaker 1: distribution centers and other other asset classes. You know this 170 00:08:56,840 --> 00:09:01,080 Speaker 1: quiet niche sector of cold storage which you know literally 171 00:09:01,200 --> 00:09:06,560 Speaker 1: thirty foot high. You know, refrigerators near infrastructure. If you're 172 00:09:06,640 --> 00:09:10,320 Speaker 1: driving past New Jersey, it past the Newark Airport, um, 173 00:09:10,400 --> 00:09:12,320 Speaker 1: and you're going north, you'll look on your right hand 174 00:09:12,320 --> 00:09:15,000 Speaker 1: side and you'll see a couple of there for instance. Yeah, 175 00:09:15,040 --> 00:09:18,719 Speaker 1: it's pretty interesting. Um, And I do wonder about and 176 00:09:18,760 --> 00:09:20,679 Speaker 1: I have to say, in addition to the vaccine, I 177 00:09:20,679 --> 00:09:23,000 Speaker 1: find it fascinating what you're saying about that we're all 178 00:09:23,040 --> 00:09:25,680 Speaker 1: eating more fresh stuff, right, and we also live in 179 00:09:25,679 --> 00:09:29,400 Speaker 1: a world where seasonally, Remember we used to eat apples 180 00:09:29,400 --> 00:09:30,920 Speaker 1: at a certain time of the year and peaches at 181 00:09:30,920 --> 00:09:32,840 Speaker 1: a certain time of the year. But because of the 182 00:09:32,840 --> 00:09:36,480 Speaker 1: global food market, stuff can move around and get to markets. 183 00:09:36,480 --> 00:09:38,720 Speaker 1: But you need cold storage in order for it to work. Well, 184 00:09:39,600 --> 00:09:41,800 Speaker 1: yeah you do. And actually one of the interesting fun 185 00:09:41,880 --> 00:09:44,360 Speaker 1: facts about COVID is that there's been a huge blood 186 00:09:44,360 --> 00:09:47,240 Speaker 1: of French fries. Apparently we eat eat a lot more 187 00:09:47,240 --> 00:09:49,319 Speaker 1: of those at restaurants that we do at home. So 188 00:09:49,360 --> 00:09:52,080 Speaker 1: that's the French fried market is oversupplied in the cold 189 00:09:52,120 --> 00:09:55,000 Speaker 1: storage world. Well, listen, French fries come with everything. And 190 00:09:55,040 --> 00:09:56,960 Speaker 1: do you ever say would you like fries with that? No? 191 00:09:57,320 --> 00:10:00,400 Speaker 1: Of course you say yes, it makes complete sense. So 192 00:10:00,480 --> 00:10:02,760 Speaker 1: tell me about your investors at this point. Are they 193 00:10:02,760 --> 00:10:05,200 Speaker 1: willing to commit new money? Have they been willing to 194 00:10:05,200 --> 00:10:07,400 Speaker 1: commit new money? Especially when I think about there's some 195 00:10:07,480 --> 00:10:09,960 Speaker 1: real estate distressed assets out there, whether it's in the 196 00:10:10,000 --> 00:10:12,760 Speaker 1: retail world. You know, what are the trends that you 197 00:10:12,800 --> 00:10:14,720 Speaker 1: think are happening now that are here to stay and 198 00:10:14,720 --> 00:10:17,160 Speaker 1: that you're seeing kind of investor move money kind of 199 00:10:17,160 --> 00:10:22,200 Speaker 1: reflect that. Well, people are very cautious about buying into 200 00:10:22,400 --> 00:10:26,720 Speaker 1: core real estate today because it's really reflecting a stale valuation. 201 00:10:26,840 --> 00:10:28,880 Speaker 1: So the first markets to reprice are going to be 202 00:10:28,920 --> 00:10:32,760 Speaker 1: your liquid markets, your read markets, your traded debt markets, 203 00:10:32,760 --> 00:10:35,160 Speaker 1: and the read markets pricing in about a ten percent 204 00:10:35,280 --> 00:10:38,720 Speaker 1: decline in commercial real estate values, which is probably about right. 205 00:10:39,160 --> 00:10:42,480 Speaker 1: It's very bifurcated though, between winners and losers. The sunbuilt 206 00:10:42,480 --> 00:10:45,959 Speaker 1: apartment in in in the in the suburbs, in a 207 00:10:46,000 --> 00:10:48,440 Speaker 1: place like Phoenix is worth more today than it was 208 00:10:48,520 --> 00:10:51,959 Speaker 1: pre COVID. An industrial warehouse asset is worth more today 209 00:10:52,000 --> 00:10:54,400 Speaker 1: than it is pre COVID. And there's big question marks 210 00:10:54,440 --> 00:10:57,560 Speaker 1: about parts of retail, particularly the more space. We've seen 211 00:10:57,559 --> 00:11:01,600 Speaker 1: a number of players file for bank see there. Uh 212 00:11:01,600 --> 00:11:04,240 Speaker 1: and you know other assets to like New York apartment 213 00:11:04,360 --> 00:11:08,040 Speaker 1: so New York office um and and so I think 214 00:11:08,040 --> 00:11:11,360 Speaker 1: people are very cautious about investing into the private space. 215 00:11:11,400 --> 00:11:14,319 Speaker 1: But what they're doing is investing into those asset classes 216 00:11:14,600 --> 00:11:18,040 Speaker 1: that have had some price discovery within real estate, which 217 00:11:18,120 --> 00:11:21,600 Speaker 1: is really reads and real estate debt. The question is 218 00:11:21,800 --> 00:11:24,520 Speaker 1: what is value right, It's going to be very much 219 00:11:24,520 --> 00:11:30,040 Speaker 1: a K shape recovery. UM, it's potentially not mean reverting 220 00:11:30,120 --> 00:11:32,680 Speaker 1: for some areas. So you know, we continue to be 221 00:11:32,840 --> 00:11:37,280 Speaker 1: very very cautious as a related to to mall's secondary 222 00:11:37,320 --> 00:11:41,880 Speaker 1: shopping centers, UM, you know, older office stock. But you 223 00:11:41,880 --> 00:11:44,640 Speaker 1: know what what where we have been uh, I guess 224 00:11:44,800 --> 00:11:47,320 Speaker 1: looking for value is in the apartment space. We talked 225 00:11:47,320 --> 00:11:50,559 Speaker 1: about major cities like San Frd and New York. Those 226 00:11:50,559 --> 00:11:54,000 Speaker 1: assets will come back. That is more of a temporary phenomena, 227 00:11:54,440 --> 00:11:56,440 Speaker 1: but it's going to be very hard over the next 228 00:11:56,480 --> 00:11:59,360 Speaker 1: five years to bet against the huge institutional wave of 229 00:11:59,400 --> 00:12:02,480 Speaker 1: capital as going to be looking for these growth asset 230 00:12:02,559 --> 00:12:07,400 Speaker 1: classes like life science, cold storage, industrial warehouse, data centers, 231 00:12:07,400 --> 00:12:11,000 Speaker 1: and cell towers. And the problem the institutional real estate 232 00:12:11,040 --> 00:12:13,839 Speaker 1: world has is that they own the best footprint of 233 00:12:14,000 --> 00:12:17,120 Speaker 1: yesterday and maybe not the best footprint for the next 234 00:12:17,120 --> 00:12:20,640 Speaker 1: ten years. And we're responding to that by investing in 235 00:12:20,679 --> 00:12:23,840 Speaker 1: these you know what, had been alternative asset classes. But frankly, 236 00:12:24,240 --> 00:12:26,920 Speaker 1: what's more important to a company today? It's office building 237 00:12:27,000 --> 00:12:30,720 Speaker 1: or data center? Yeah, exactly right. It tells something very clearly. 238 00:12:30,960 --> 00:12:33,800 Speaker 1: Scott always learned something with you, so thank you so much, 239 00:12:33,800 --> 00:12:36,520 Speaker 1: Scott Crow. Have a good holiday, a safe holiday, and 240 00:12:36,520 --> 00:12:38,920 Speaker 1: hopefully we can talk with you uh in the new 241 00:12:39,000 --> 00:12:41,520 Speaker 1: year as well. Scott Crow he's managing director, Chief Investment 242 00:12:41,559 --> 00:12:44,920 Speaker 1: Strategies at Center Square Investment Management. Joining us on the 243 00:12:45,040 --> 00:12:46,160 Speaker 1: phone from Philadelphia.