WEBVTT - Swig Waiting for World to Reopen 0:00:00.120 --> 0:00:03.640 You're listening to Bloomberg Business Week with Carol Masser and 0:00:03.800 --> 0:00:07.200 Jason Kelly on Bloomberg Radio. This is one of these 0:00:07.200 --> 0:00:10.400 conversations we've been we've been looking forward to Carrolly. You're 0:00:10.480 --> 0:00:13.360 so eager well and right up in the camera. I 0:00:13.400 --> 0:00:15.000 know I'm up right up in the camera. Well, he's 0:00:15.000 --> 0:00:17.960 a favorite of ours. And you know, we were reminded 0:00:18.040 --> 0:00:19.799 that the last time he was in our studio was 0:00:19.920 --> 0:00:24.240 back at Bloomberg headquarters. It was the last in studio 0:00:24.320 --> 0:00:26.400 interview that we did. I keep saying it was Friday. 0:00:27.040 --> 0:00:30.520 It was Friday the March, if you will. It was 0:00:30.560 --> 0:00:32.800 a very thoughtful conversation about kind of how our world 0:00:32.840 --> 0:00:37.640 was being impacted because of the virus. Little did we know. 0:00:37.800 --> 0:00:40.400 You're so right, Jason Ken Swig is back with us. 0:00:40.440 --> 0:00:43.199 He is president of Swig Equities, and he's on the 0:00:43.240 --> 0:00:45.199 phone from Bridge Hampton. And from what I understand, you 0:00:45.280 --> 0:00:46.840 drove in a little bit so you could get better 0:00:46.880 --> 0:00:49.920 sell service. So Kent, thank you so much, um for 0:00:50.040 --> 0:00:52.400 doing that. Tell us about your world and how you're 0:00:52.400 --> 0:00:56.160 doing well. It's a pleasure to be back. And uh, 0:00:56.280 --> 0:00:58.840 my world is I think, like everybody else is a 0:00:58.880 --> 0:01:02.319 bit it seems more like a science fiction movie than 0:01:02.360 --> 0:01:04.920 it does a reality I'm listening to the radio and 0:01:04.959 --> 0:01:08.319 saying talking Bloomberg Radio says, Oh, the world, the United 0:01:08.360 --> 0:01:10.960 States economy is about to try to open again. I mean, 0:01:11.440 --> 0:01:13.880 I can't believe those kind of words are coming out 0:01:13.920 --> 0:01:16.880 of us. So I'm the same as everybody else. You know, 0:01:16.959 --> 0:01:20.720 I'm sipping sheltering in place and and uh, waiting for 0:01:20.760 --> 0:01:24.480 the world to reopen. And so what's your read on that, Kent, 0:01:24.640 --> 0:01:27.640 Because you know you have interest all over the country 0:01:28.000 --> 0:01:31.080 east coast, west coast, places in between. You're talking to 0:01:31.160 --> 0:01:35.080 people all the time. I mean, what's your read on 0:01:35.160 --> 0:01:38.679 this kind of checkerboard that we seem to have in 0:01:38.800 --> 0:01:44.520 terms of plans and aspirations to get this all going again. Well, 0:01:45.000 --> 0:01:47.840 the first thing I think we want to do is 0:01:47.880 --> 0:01:50.160 to make sure that everybody is healthy and safe, right, 0:01:50.240 --> 0:01:53.400 and the way to do that is through testing, similar 0:01:53.440 --> 0:01:55.520 to what we talked about last time I was with you. 0:01:55.640 --> 0:01:58.640 And so the critical component is is to try to 0:01:58.680 --> 0:02:02.840 get as many tests of our population as possible. Uh. 0:02:02.840 --> 0:02:05.520 And once we know and have knowledge, then we can 0:02:05.560 --> 0:02:10.440 start to begin to go back into the productive work schedules. Um. 0:02:10.919 --> 0:02:16.120 Albeit differently, but we need to find information first. Yeah. 0:02:16.120 --> 0:02:18.000 You know. One of the things Kent that Jason and 0:02:18.000 --> 0:02:21.520 I've talked a lot about, um because of a Bloomberg story, 0:02:21.560 --> 0:02:24.680 but it's been in kind of our psyche. Uh, if 0:02:24.720 --> 0:02:28.080 you will is fear versus greed. Um. There's so much 0:02:28.160 --> 0:02:31.320 fear talking to Henry Cornell about uh. And I think 0:02:31.400 --> 0:02:33.600 actually the chairman was it of Jet Blue, you know 0:02:33.639 --> 0:02:38.240 about people are afraid to come back to work. Um, 0:02:38.360 --> 0:02:42.079 and so you will ultimately initially ask people to come 0:02:42.120 --> 0:02:44.959 back to work, and until they know it's safe and secure, 0:02:46.000 --> 0:02:48.280 it's not going to happen. Um. And then at the 0:02:48.320 --> 0:02:51.200 same time, there's incredible pressure for companies to kind of 0:02:51.360 --> 0:02:55.440 get back to it. Uh, in order to survive. Well, 0:02:56.639 --> 0:02:59.000 let's put it, if you are a greedy person or 0:02:59.000 --> 0:03:02.840 a greedy company, um, then you're going to do things 0:03:02.919 --> 0:03:05.959 that would be productive for you in business. And being 0:03:05.960 --> 0:03:08.880 productive in business means that you have to have people 0:03:08.960 --> 0:03:11.600 by your product. You have to have people working for you, 0:03:12.040 --> 0:03:19.800 and that all means having people. Would we just lose Kent, think, okay, 0:03:20.320 --> 0:03:22.080 we just lost Kent for a minute. We're gonna try 0:03:22.120 --> 0:03:25.519 and get him back. But um, you know it's interesting 0:03:25.960 --> 0:03:29.200 to hear Kent talk about the real estate world. I 0:03:29.240 --> 0:03:32.360 was just looking at his story earlier, Carol, our friend 0:03:32.360 --> 0:03:36.200 Tom Barrick, we've talked to him before you about a 0:03:36.240 --> 0:03:40.320 year ago, I believe moderated panel that he had that 0:03:40.400 --> 0:03:43.400 he participated in milk and talking about real estate. You know, 0:03:43.520 --> 0:03:47.160 he told Eric Chatzker earlier today that the real estate 0:03:47.240 --> 0:03:51.880 market is in chaos. You've got laws waved on rent 0:03:52.240 --> 0:03:55.840 and debt, and I mean this is the lifeblood of 0:03:55.880 --> 0:03:58.360 this industry, you know, sort of the income and the 0:03:58.400 --> 0:04:03.440 ability to borrow. Yeah. Absolutely. And the thing is, you know, 0:04:03.480 --> 0:04:05.600 we are learning each day that goes by. If people 0:04:05.640 --> 0:04:10.840 aren't paying their rent, um, aren't paying um these you know, 0:04:10.840 --> 0:04:13.040 our mortgages, you know, then it starts to work its 0:04:13.080 --> 0:04:16.240 way through the system because then financial firms that are 0:04:16.279 --> 0:04:19.320 doing the lending are getting impact. Right, it starts to 0:04:19.360 --> 0:04:21.839 work its way through the system. So you're right, he said, 0:04:21.880 --> 0:04:24.520 we haven't had a crisis like this. We've never had 0:04:24.560 --> 0:04:28.840 one where we just have a government, um um taking 0:04:29.560 --> 0:04:31.760 a revenue. Is that right? We've never had one where 0:04:31.760 --> 0:04:34.680 we just have a government taking of revenue. Um. Let's 0:04:34.680 --> 0:04:38.000 go back to Kent. Swig president of SWIG Equities once 0:04:38.040 --> 0:04:40.480 again with us from Bridge Hampton. Hey, Ken, I'm glad 0:04:40.520 --> 0:04:42.240 you we were able to get you back. You were saying, 0:04:42.240 --> 0:04:44.120 you were talking about if you're a greedy person, and 0:04:44.120 --> 0:04:47.520 I'm assuming you know, um, you know you're gonna you're 0:04:47.520 --> 0:04:50.720 gonna maybe do things you shouldn't do. Well, I'm saying 0:04:50.720 --> 0:04:53.359 even agreed now, it has the same motivations and everybody 0:04:53.360 --> 0:04:55.360 else is that they want an economy to be back, 0:04:55.440 --> 0:04:57.320 They want people to buy their product, and they want 0:04:57.640 --> 0:05:00.240 their workers to be working. So there's some I have 0:05:00.240 --> 0:05:03.400 a more narrow focus, some have a little bit broader focus. 0:05:03.440 --> 0:05:08.200 But nonetheless it's the same goals in mind, so that 0:05:08.520 --> 0:05:10.200 it doesn't work. If we open up too soon and 0:05:10.279 --> 0:05:12.200 have to close back, that's going to do more damage. 0:05:12.240 --> 0:05:15.360 So I would say that greed doesn't play a role 0:05:15.440 --> 0:05:18.120 here as much as it is as as looking at 0:05:18.120 --> 0:05:23.000 a broad perspective and a proper perspective. So can in 0:05:23.120 --> 0:05:25.680 our little interregnum there we're when we're getting you back. 0:05:25.720 --> 0:05:28.960 I was reading our listeners some comments that Tom Barrick 0:05:29.080 --> 0:05:32.120 made a well known figure to you, I'm sure, uh, 0:05:32.320 --> 0:05:35.000 colleague there in the in the real estate industry and 0:05:35.440 --> 0:05:37.720 he was, you know, sort of weighing in as I 0:05:37.720 --> 0:05:39.200 would love for you to weigh in on sort of 0:05:39.240 --> 0:05:43.400 this notion of rent forbearance and you know, essentially landlords 0:05:43.400 --> 0:05:46.000 saying no, you know, just just get me when you 0:05:46.040 --> 0:05:49.600 can or differ or whatever that is. How is that 0:05:49.640 --> 0:05:52.760 working and what's the right mix and balance there in 0:05:52.800 --> 0:05:57.279 your estimation? Well, so let's take the government factor out 0:05:57.279 --> 0:06:00.680 for one moment and let's take a look at private enterprise. Um. 0:06:00.920 --> 0:06:03.760 So I'm a building owner on one of my companies, right, Um, 0:06:03.960 --> 0:06:07.520 my family has properties. I have properties, and you know, 0:06:07.680 --> 0:06:10.240 people laugh at me, my colleagues sometimes say, but basically 0:06:10.320 --> 0:06:13.760 I'm a tenant service provider. I am own owning. Buildings 0:06:13.760 --> 0:06:16.600 are meaningless. It's the people inside them that count. And 0:06:16.640 --> 0:06:18.920 those people are rent paying people. So if they can't 0:06:18.920 --> 0:06:22.080 pay rent, were nowhere. Um. At the same time, if 0:06:22.120 --> 0:06:24.240 these companies don't have money to pay rent and go 0:06:24.240 --> 0:06:28.520 out of business, then you're really nowhere. So unfortunately, you know, 0:06:28.839 --> 0:06:33.960 our debt service, our utilities are real estate taxes need 0:06:34.040 --> 0:06:36.160 to be paid and we get that from rent. But 0:06:36.200 --> 0:06:38.320 if if so, we have to have a balance here. 0:06:38.520 --> 0:06:41.120 So forgetting the government for a moment, we have to 0:06:41.160 --> 0:06:43.360 work with our tenants in some way, shape or form 0:06:43.520 --> 0:06:46.400 to make sure that they have viable companies because if 0:06:46.400 --> 0:06:49.240 they all go out, we're left with big, huge buildings 0:06:49.360 --> 0:06:52.880 that are empty and meaningless. Um. So you know, there 0:06:52.960 --> 0:06:54.960 is a balance there that we have to allow tenants 0:06:55.400 --> 0:06:57.440 to be able to get on their feet in some way. 0:06:57.480 --> 0:06:59.800 So one of the questions first people ask is you know, 0:07:00.000 --> 0:07:02.240 have you applied for any government grants? Have you have 0:07:02.320 --> 0:07:05.479 you received anything? Because you know then you know what 0:07:05.600 --> 0:07:07.080 kind of shape they're in and what they can do, 0:07:07.160 --> 0:07:10.640 and you have to work with them. Um. But it's 0:07:10.640 --> 0:07:12.960 going to be a difficult with April what's going on, 0:07:13.040 --> 0:07:14.760 and May it's probably going to be worse because the 0:07:15.240 --> 0:07:17.480 people you May is going to be the worst hold 0:07:17.520 --> 0:07:19.920 that thought. We're going to continue this conversation in just 0:07:20.040 --> 0:07:22.600 a minute. Ken Swig is with as president of Swig Equities, 0:07:22.920 --> 0:07:25.800 joining us on the phone. A lot more to talk 0:07:25.840 --> 0:07:27.880 about when it comes to real estate. Also want to 0:07:27.920 --> 0:07:30.600 talk to him a lot because about New York City, 0:07:30.720 --> 0:07:33.520 because it's a city he knows really, really well. And 0:07:33.560 --> 0:07:36.760 I do feel like no one would disagree with the 0:07:36.800 --> 0:07:38.480 idea that, at least in the short term, the city 0:07:38.520 --> 0:07:40.680 is going to be fundamentally changed, maybe more than the 0:07:40.720 --> 0:07:42.520 short term. So I want to pose that question to 0:07:43.120 --> 0:07:46.360 really right, but you know what life is like and 0:07:46.720 --> 0:07:48.760 we do come back. So we'll get his thoughts on 0:07:48.800 --> 0:07:50.400 that in just a moment. We're going to continue our 0:07:50.400 --> 0:07:53.679 conversation now with Kent Swig, president of Swig Equities, joining 0:07:53.760 --> 0:07:57.680 us on the phone from Long Island. So, Kent, uh, 0:07:58.000 --> 0:07:59.680 he spent a lot of time in New York City. 0:07:59.680 --> 0:08:01.680 That's where we last saw you, as we mentioned at 0:08:01.680 --> 0:08:04.680 the top of the conversation there in Midtown. How does 0:08:04.720 --> 0:08:08.360 New York change out of this? Well, one thing that 0:08:08.400 --> 0:08:13.040 New Yorkers are, if anything, is resilient. So we look 0:08:13.120 --> 0:08:16.400 back at the pandemic that existed in nineteen eighteen, you 0:08:16.440 --> 0:08:20.559 know where sixty million, sixty five million people passed away, 0:08:20.680 --> 0:08:23.440 I mean unbelievable amount. And then you look at what 0:08:23.520 --> 0:08:26.560 happened in America in nineteen twenties, right, you know, people 0:08:26.560 --> 0:08:30.320 were back, they were dancing, they were out. So this 0:08:30.400 --> 0:08:34.280 is a horrendous, terrible thing, no doubt. At the same time, 0:08:34.920 --> 0:08:38.040 we've got you know, much more better, much better science, 0:08:38.120 --> 0:08:40.600 much more technology, and I think that will end up 0:08:40.600 --> 0:08:44.199 with a vaccine of sorts at least um and and 0:08:44.320 --> 0:08:46.840 a way to stabilize ourselves. And people will be back 0:08:46.880 --> 0:08:48.800 and they will be going out, but it will take 0:08:48.840 --> 0:08:52.840 a moment. Unlike other situations we've been in where people, 0:08:53.160 --> 0:08:56.520 you know, the situation ended and then people started going 0:08:56.559 --> 0:08:58.960 back into the regular routines, this isn't going to have 0:08:59.000 --> 0:09:01.679 a you know, a five line that it ends. This 0:09:01.760 --> 0:09:04.080 is going to be a longer period of time where 0:09:04.120 --> 0:09:06.839 it's a slow comeback, but we will be back in 0:09:06.920 --> 0:09:08.760 New York is a very strong place and it's a 0:09:08.840 --> 0:09:12.440 capital city of the world. Um And, and it's a 0:09:12.440 --> 0:09:15.400 painful process, but we'll be better for it and will 0:09:15.440 --> 0:09:18.160 be better prepared for it. How will we be better 0:09:18.200 --> 0:09:22.360 for it, Well, one thing is this we if you 0:09:22.360 --> 0:09:25.080 look at the federal government, you know, the basic element 0:09:25.120 --> 0:09:28.319 of the federal government is to protect the life, liberty, 0:09:28.480 --> 0:09:31.120 and health and safety of Americans, right and we look 0:09:31.120 --> 0:09:34.080 at this with four branches of the military. I think, frankly, 0:09:34.120 --> 0:09:36.520 what has happened in this administration is that we failed 0:09:36.520 --> 0:09:39.360 to look at the fifth branch of our secure system, 0:09:39.360 --> 0:09:42.560 which is a CDC, the Center of Disease Control UM. 0:09:42.640 --> 0:09:46.520 The administration currently took the head person off of the 0:09:46.600 --> 0:09:50.319 National Security Council. We've cut back eight sixteen over the 0:09:50.320 --> 0:09:53.960 past two years, respectively, um from the CDC, and that's 0:09:54.040 --> 0:09:56.600 just can't happen. So where will we be better for 0:09:56.640 --> 0:09:59.120 it is that Americans will demand that the c d 0:09:59.280 --> 0:10:04.240 C and other organizations are a functioning major part of 0:10:04.240 --> 0:10:07.280 our civil defense and our national defense, and we will 0:10:07.320 --> 0:10:10.400 protect ourselves. You know, we're we're storing nuclear weapons, Lord forbid, 0:10:10.440 --> 0:10:12.720 we never want to use them. We need to store 0:10:12.800 --> 0:10:16.079 ventilators that we hopefully never will need. But that doesn't 0:10:16.120 --> 0:10:18.640 mean we don't have them. So we have. We've caught 0:10:18.679 --> 0:10:22.360 ourselves unprepared for something like this because we let we 0:10:22.440 --> 0:10:24.200 didn't we let it go, or we didn't think about it. 0:10:24.240 --> 0:10:26.800 And it's a major leg of our defense. And I 0:10:26.840 --> 0:10:29.640 think we will be better for the future generations because 0:10:29.679 --> 0:10:32.720 we will understand that and will take the necessary precautions 0:10:32.760 --> 0:10:38.200 to never let this happen again. Unprepared unpreparedness never happened again. 0:10:38.320 --> 0:10:42.160 Yea son, How does this change you as a business person? 0:10:42.200 --> 0:10:44.720 How does it change you as an investor? As someone 0:10:44.840 --> 0:10:47.640 who is you know you are ultimately, as you said 0:10:47.920 --> 0:10:51.000 earlier in the conversation, your your business is all about people, 0:10:51.240 --> 0:10:54.280 giving people places to be and to live and to work. 0:10:55.200 --> 0:10:57.599 How does it change the choices that you make in 0:10:57.640 --> 0:11:01.200 the short and the midterm. Well, the short term is 0:11:01.400 --> 0:11:03.960 the safety and health of our workers and and and 0:11:04.520 --> 0:11:07.480 trying to get our companies to be safe secure so 0:11:07.520 --> 0:11:10.840 we can continue to employ all the people that we do. UM, 0:11:10.840 --> 0:11:13.280 our businesses are going to change. We're in you know, 0:11:13.400 --> 0:11:16.320 both residential and commercial. The way we live and work 0:11:16.400 --> 0:11:18.040 is going to change. The way we work is going 0:11:18.120 --> 0:11:21.600 to change. Um. You know, if if buildings for cleaning 0:11:21.960 --> 0:11:24.200 once a week, apart me once a day, you know, 0:11:24.280 --> 0:11:27.000 their lobbies and elevators, etcetera, it's now going to be 0:11:27.040 --> 0:11:30.240 an hourly cleaning. It's not more. Um, there's gonna be 0:11:30.280 --> 0:11:34.080 a whole new way of looking at things. In in Manhattan, 0:11:34.120 --> 0:11:36.200 there was roughly three hundred square feet per person in 0:11:36.240 --> 0:11:40.120 an office building. Um. Today you know it brought down 0:11:40.200 --> 0:11:42.280 to about a hundred eighty square feet because we were 0:11:42.280 --> 0:11:45.199 able to have more open landscaping, packed people in more 0:11:45.240 --> 0:11:49.720 dense communities, etcetera. That's going to change back the other way. So. UM. 0:11:49.880 --> 0:11:52.480 The other thing is that people will find that possibly 0:11:52.520 --> 0:11:54.080 you know you've got you don't have to go to 0:11:54.080 --> 0:11:55.880 work five days a week. You can work two days 0:11:55.920 --> 0:11:58.600 from home. Maybe. Um, So there will be a different 0:11:58.600 --> 0:12:02.120 way of structuring our jaw market. It's gonna have a 0:12:02.160 --> 0:12:05.160 whole new view. Smaller kitchens in Manhattan may not be 0:12:05.200 --> 0:12:07.440 the idea anymore because people may need to have a 0:12:07.480 --> 0:12:09.120 larger kitchen and be able to want to cook and 0:12:09.160 --> 0:12:11.240 stay in. So I think it's going to have a 0:12:11.280 --> 0:12:13.680 lot of ramplications of the way we are. But our 0:12:13.760 --> 0:12:17.840 our ability to to go after life and live life 0:12:17.920 --> 0:12:20.280 and want all these great things, I don't think it's 0:12:20.280 --> 0:12:22.040 going to be diminished. I think it's going to be 0:12:22.320 --> 0:12:28.520 just refocused a little while. And so I do wonder 0:12:29.600 --> 0:12:33.000 you know this notion of especially from a residential perspective, 0:12:33.640 --> 0:12:36.360 Kent Weather and I say this sitting and talking to 0:12:36.360 --> 0:12:38.800 you in the suburbs, do we change the way we 0:12:38.840 --> 0:12:45.280 think about cities and suburbs. You know for sure we're 0:12:45.280 --> 0:12:48.160 going to be looking at that, of course. Um. But 0:12:48.400 --> 0:12:51.640 again I think that if look, we all went through 0:12:51.720 --> 0:12:54.720 nine eleven, which was a horrendous thing, and people were 0:12:54.760 --> 0:12:58.040 nervous about New York City and and and living here 0:12:58.040 --> 0:13:01.680 in this but what we relied on was our national 0:13:01.720 --> 0:13:05.480 government to take action and protect us. I think what 0:13:05.600 --> 0:13:08.559 the biggest problem right now is that our national government, 0:13:08.559 --> 0:13:12.839 in my opinion, sailed, and that failure is what makes 0:13:12.920 --> 0:13:17.160 people more nervous and more more susceptible to wanting for change. 0:13:17.360 --> 0:13:20.160 So that is going to be changed back because the 0:13:20.200 --> 0:13:22.760 population is not going to tolerate that kind of thing anymore, 0:13:22.920 --> 0:13:27.200 nor should they. And we're going to have in place mechanisms. 0:13:27.240 --> 0:13:29.560 I don't know all of them, but certainly we're gonna 0:13:29.559 --> 0:13:32.400 have in place mechanism new protocols of how we conduct 0:13:32.400 --> 0:13:34.520 ourselves and how we live, and and we're going to 0:13:34.640 --> 0:13:36.880 have back up, and we're going to have ways to 0:13:36.920 --> 0:13:39.800 be able to to to you know, Lord forbid another 0:13:39.880 --> 0:13:42.240 kind of virus. It's like this, ways to be able 0:13:42.280 --> 0:13:45.839 to to fight it um. And that's what hasn't happened. 0:13:45.880 --> 0:13:47.560 I think there were the Latin the fact that we 0:13:47.559 --> 0:13:50.640 were caught off guard and that we're not prepared and 0:13:50.679 --> 0:13:55.480 we weren't getting a steady, consistent message coming out of Washington, 0:13:55.559 --> 0:13:59.080 d C. That makes people reevaluate things, so I think 0:13:59.120 --> 0:14:01.880 they will. But all manly New Yorkers are it's a 0:14:01.960 --> 0:14:04.000 very exciting, wonderful place to be and I think it 0:14:04.000 --> 0:14:06.920 will continue to be that way. Well, we look forward 0:14:06.960 --> 0:14:11.040 to seeing you in person again a bookend of sorts. 0:14:11.120 --> 0:14:13.800 Nice to catch up with you in the interim, but 0:14:14.360 --> 0:14:17.400 next time in the Bloomberg Interactor Broker studio. We hope, 0:14:17.480 --> 0:14:19.720 or I don't knows, maybe over a drink would be better, 0:14:20.000 --> 0:14:23.440 exactly all right? Ken Swigg, president of SWIG Equities, on 0:14:23.480 --> 0:14:27.080 the phone from Long Island. Always appreciate his time and 0:14:27.200 --> 0:14:28.320 his thoughtful insight.