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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on Affo card playing Android

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Speaker 2: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 2: you get your podcasts, or watch us live on YouTube.

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Speaker 3: All right, we got some breaking news for you.

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Speaker 4: TikTok is officially facing a ban in the United States.

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Speaker 4: This comes after the appeals Court refuses to block the

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Speaker 4: law that would ban TikTok. Now, the whole idea is

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Speaker 4: to force a sale of TikTok here in the US

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Speaker 4: from Byteedance to an owner in the United States. Whether

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Speaker 4: or not that happens is definitely a big question mark.

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Speaker 4: Lots of question marks around this. First of all, will

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Speaker 4: Trump stand by this or will he oppose the band

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Speaker 4: and then complicate its enforcement if it was to spin off,

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Speaker 4: and if someone were.

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Speaker 3: To buy it, who would that be? What would the

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Speaker 3: numbers look like?

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Speaker 4: But either way, you take a look at Google and

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Speaker 4: Meta Meta arguably one of the competitors, right because they

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Speaker 4: have Instagram that stopped up over two percent on that headline.

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Speaker 5: Paul, Yeah, this is this is big news in the

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Speaker 5: world of you know, social media digital advertising a metagain

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Speaker 5: up two point two percent today, fifty two week high.

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Speaker 5: But boy, TikTok has become so big so quickly in

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Speaker 5: terms of number of users, their total audience, and the

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Speaker 5: advertising they generate and the retail e commerce at that

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Speaker 5: they generate just a handful of years becomes absolutely huge.

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Speaker 5: Now what did they do? Now? What does Byte Dance

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Speaker 5: do the owner again, the Chinese owner of TikTok, And

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Speaker 5: again what does President elect Trump do? As you were

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Speaker 5: talking about earlier, I'm not sure really his real position

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Speaker 5: on this.

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Speaker 4: So just for some background here, the law was signed

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Speaker 4: back in April. It did have bipartisan support, and it

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Speaker 4: was to force a divestiture from Byte Dance of TikTok

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Speaker 4: here in the US. Now, then, of course there were

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Speaker 4: lots of lawsuits et cetera. Now, leading American investors like

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Speaker 4: Sequoia Capital, General Atlantic, and Susquehanna own significant stake in

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Speaker 4: TikTok parent company By Dance, and that's collectively worth billions

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Speaker 4: of dollars. So that also then complicates the issue with

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Speaker 4: President Trump elect in office as well. Now, By Dance

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Speaker 4: was trying to get it overturned, saying the banning the

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Speaker 4: app is unconstitutional. So let's get more here with Matthew Shettenhelm.

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Speaker 4: He covers this for he's a media litigation analyst for

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Speaker 4: Bloomberg Intelligence.

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Speaker 3: All right, are you surprised?

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Speaker 6: I am not surprised. This is what we expected coming

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Speaker 6: out of the September oral argument. It was a tough

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Speaker 6: hearing for TikTok. What we haven't seen yet and it

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Speaker 6: just popped up on the dock. It is the opinion,

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Speaker 6: the reasoning from the court, and it looks like there's

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Speaker 6: a concurring opinion from at least one judge. But I

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Speaker 6: haven't been able to read the decision yet. But this,

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Speaker 6: this looks like a loss for TikTok. That's what we expected,

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Speaker 6: and that means that if it wants to stop this

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Speaker 6: spain before January nineteenth, it's only realistic option I think

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Speaker 6: is probably going to be to go to the Supreme

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Speaker 6: Court now and try to ask the justices at the

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Speaker 6: Supreme Court to hit pause on that January nineteenth date.

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Speaker 5: And what typically would how would the Supreme Court respond

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Speaker 5: to that type of request hit typically given what this

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Speaker 5: ruling here.

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Speaker 6: Yeah, so I mean it's you know, you go on

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Speaker 6: what's known as the shadow docket at the Supreme Court

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Speaker 6: where the court it looks at emergency relief. And the

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Speaker 6: thing is it's hard to get that. You usually need

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Speaker 6: five justices to vote in support of it. And so

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Speaker 6: there's a risk and again, I want to read this decision,

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Speaker 6: but there's a risk I think for TikTok, that the

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Speaker 6: justices say, look, you know, the DC Circuit got it right,

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Speaker 6: We don't really need to get in the way of this.

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Speaker 6: On the other hand, this is potentially a major First

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Speaker 6: Amendment question, and maybe the justices say, look, this is

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Speaker 6: so important, let's hit pause on that January nineteenth date.

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Speaker 6: We can take it up and then they'd probably decide

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Speaker 6: it by June of this year if they're so inclined.

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Speaker 4: Okay, so let's pretend that we move forward to January nineteenth, right,

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Speaker 4: and that's the date where it would be banned. So

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Speaker 4: if my kids on TikTok, which she's not like does,

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Speaker 4: she automatically can't get on it. But if she goes

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Speaker 4: to like Mexico, she can access TikTok. Like, is that

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Speaker 4: what I'm looking at?

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Speaker 2: Yeah?

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Speaker 6: So yeah, on January nineteenth. The way the law works

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Speaker 6: is it doesn't strip it off of everyone's phones on

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Speaker 6: that date. The way the law works, it says that

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Speaker 6: as of that date, any company that carries the app

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Speaker 6: in its app store or that carries TikTok on servers

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Speaker 6: in a way that allows the app to update no

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Speaker 6: longer can do so. If they do so, they're at

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Speaker 6: the risk of gigantic penalties. It's something like five thousand

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Speaker 6: dollars per user. And so if the DJ is willing

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Speaker 6: to enforce it, which is going to be another question,

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Speaker 6: President Trump, you know, potentially could tell his DJ, look,

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Speaker 6: don't worry about enforcing that law. But if you're a

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Speaker 6: company that carries TikTok in your app store, are you

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Speaker 6: going to take a chance that President Trump is not

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Speaker 6: going to enforce something that could reach billions of dollars

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Speaker 6: in liability against you? I'm not so sure.

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Speaker 5: What do we know about President elect Trump and his

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Speaker 5: administration how they're viewing this particular issue. Have they opined

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Speaker 5: on this yet?

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Speaker 6: Yeah, Well, so Trump's been back and forth on this issue.

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Speaker 6: So President Trump was the first one to propose a

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Speaker 6: TikTok fan and his administration moved ahead with one and

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Speaker 6: then only then fell in you know, in trouble in

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Speaker 6: court because he tried to do it himself without Congress.

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Speaker 6: Then this time Congress did it and passed it. President

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Speaker 6: Biden signed it, but then Trump reversed himself, and now

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Speaker 6: Trumps has said publicly, look, we don't want to help Meta.

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Speaker 6: I don't support a TikTok fan anymore. The problem is

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Speaker 6: it's already law, it's already done, and I think it's

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Speaker 6: a It's a difficult thing for him to convince Congress,

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Speaker 6: which passed this on a bipartisan basis, to reverse itself,

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Speaker 6: and so his only options would be kind of the

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Speaker 6: unusual course, Oh, we're not going to enforce a law

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Speaker 6: that Congress just passed, or you know, you know, or

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Speaker 6: approving some sort of sale a divestiture, but there's no

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Speaker 6: indication that China would allow that sort of a divestiture.

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Speaker 4: All right, really great stuff, Really appreciate it. Thank you

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Speaker 4: so very much for jumping on with us. Matthew Shetenhelm,

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Speaker 4: media litigation channalyst for Bloomberg Intelligence. And then of course,

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Speaker 4: like TikTok is a really big customer of Oracle, what

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Speaker 4: does that mean for Oracle? Meta has Instagram? It's that

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Speaker 4: good for Meta et cetera. So going down that rabbit.

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Speaker 3: Hole as well.

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Speaker 2: Just Say Alexa Play Bloomberg eleven thirty and.

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Speaker 5: A lot of economic data popping out today. Leading off

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Speaker 5: this morning at eight thirty. Change in non farm payrolls

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Speaker 5: cam in it better than expected twohundred twenty seven thousand

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Speaker 5: versus the consensus of two hundred and twenty thousand. The

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Speaker 5: revision from the last month was from twelve thousand to

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Speaker 5: thirty six thousand, So some good numbers there. Tom Gimmel

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Speaker 5: joins us. We always love to check in with Tom

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Speaker 5: one on jobs Day. Tom is the founder and board

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Speaker 5: metal member of LaSalle Network, one of the leading staffing

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Speaker 5: and recruiting firms in the country. Tom, pretty solid number.

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Speaker 5: What would you take away from the non farm payroll data?

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Speaker 7: Well, number one, I'm not wearing any Sophora or Lulu

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Speaker 7: Lemon at the moment.

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Speaker 3: Thanks for clarifying.

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Speaker 7: Uh huh, yeah, I want to make sure we're clear

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Speaker 7: on that, but no, these this is you guys know,

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Speaker 7: when we're putting up over two hundred thousand jobs, you

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Speaker 7: know how I respond that things are great, and we've

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Speaker 7: got got to look at that as a very strong

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Speaker 7: positive Average hourly wages up a little bit, average hours

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Speaker 7: worked up a little bit, revisions were not bad. That's

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Speaker 7: a good thing. Like everything is pointing positively. I really

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Speaker 7: hope that the Fed does not lower interest rates. I

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Speaker 7: don't think we need it. I think it's something we're

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Speaker 7: going to need the dry powder in the latter part

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Speaker 7: of next year and to make sure that we realize

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Speaker 7: this economy is going really strong and with unemployment inching

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Speaker 7: up that that's exactly what everybody's been saying, we need

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Speaker 7: curb inflation.

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Speaker 4: So the counter to that is the household survey being

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Speaker 4: a lot weaker.

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Speaker 3: What'd you make of that, listen.

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Speaker 7: I think that if we're looking for areas of weakness,

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Speaker 7: this is why economists have jobs, They're always going to

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Speaker 7: find some number that goes against the grain of what

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Speaker 7: everything else says. My feeling is what we know is

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Speaker 7: factual more people are working. Unemployment historically at four point

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Speaker 7: two is still very very low and unemployment is going

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Speaker 7: to go up. Why is it going to go up

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Speaker 7: because of Dodge or doge is when we do that,

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Speaker 7: when musk and and vevect it in there and we

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Speaker 7: shed government employees, they are going to file for unemployment

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Speaker 7: and they don't automatically convert to the private sector. And

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Speaker 7: so we're going to have a situation where I believe

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Speaker 7: unemployment is going to go up naturally, and we're going

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Speaker 7: to need to be able to have that lever to

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Speaker 7: to pull of lowering interest rates, and we don't want

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Speaker 7: to use it now.

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Speaker 5: Average hourly earnings on a year of a year basis

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Speaker 5: of four percent a little bit better than the expectation.

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Speaker 7: What's the wage environment hold? I mean, think about that

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Speaker 7: for a second. If somebody gets a three percent raise

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Speaker 7: as a cost of living increase the cost of living

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Speaker 7: adjustment COLA, we say that that's what corporate America does

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Speaker 7: all the time. We're talking about four percent average hourly

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Speaker 7: earnings year over year. That's that's a third better than

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Speaker 7: what average increases are in corporate America. I think those

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Speaker 7: are really good.

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Speaker 5: Numbers inflationary for you or is this just again a

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Speaker 5: healthy labor market?

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Speaker 7: No, I think it's a little bit of inflationary, but

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Speaker 7: we're looking at you know what we still have. We

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Speaker 7: all go to restaurants, we see that there isn't enough

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Speaker 7: workers and even though that's where the majority, so much

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Speaker 7: of the hiring was done this past month and going

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Speaker 7: into the holiday season, you're going to have more of that.

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Speaker 7: There's a lot of positive feelings, whether you whether you

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Speaker 7: like the results of the election or not, that it's

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Speaker 7: anti regulation and it's really pro business, and so companies

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Speaker 7: are going to be hiring and wages are going to

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Speaker 7: go up because in order to get people for the

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Speaker 7: jobs that are in demand, i e. Service jobs, or

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Speaker 7: to get people to leave in white collar jobs, you're

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Speaker 7: going to have to pay more and it's going to

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Speaker 7: increase that dollar amount. But I think, yeah, I want

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Speaker 7: to repeat, when we get more federal workers who are

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Speaker 7: filing for unemployment, that number is going to go up

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Speaker 7: and you'll see the inflation come down naturally.

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Speaker 4: Yeah, that's such a good point that we forget that

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Speaker 4: that that that's coming at some point over the next

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Speaker 4: few years. Thanks so much, Tom, really appreciate a Ton Gimbal,

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Speaker 4: founder and board member of Lacell Network.

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Speaker 2: you get your podcasts, or watch us live on YouTube.

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Speaker 4: All right, let's get back to the economic data of

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Speaker 4: the morning. That if I dare say, goldilocks a job report.

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Speaker 4: Jeffrey Cleveland is chief economists over at Peyton and Regal,

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Speaker 4: and he joins us now as he does every job's Friday.

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Speaker 3: Hey, Jeffrey, is this a Goldilocks report?

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Speaker 6: Like?

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Speaker 4: Can I say that? Or is there another word I

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Speaker 4: can use.

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Speaker 3: To describe this?

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Speaker 1: Yeah, goldilocks, soft landing. I think both of those phrases work.

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Speaker 1: You've got decent headline job growth. The three month average,

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Speaker 1: I think was one hundred and ninety thousand. Sorry, the

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Speaker 1: twelve month average was one hundred ninety thousand. The three

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Speaker 1: month averages around one hundred and eighty thousand, So that's

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Speaker 1: enough I think to keep downward pressure on the unemployment rate.

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Speaker 3: So that's good.

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Speaker 1: There's probably enough concern about the unemployment rate ticking up

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Speaker 1: like it did in the port to four point two.

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Speaker 1: So from a risk management perspective, I think the FED,

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Speaker 1: you know, keeps on cutting, so we get a cut

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Speaker 1: in December, but there's no evidence of a recession here.

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Speaker 1: So you've got you know, continued economic growth, no recession,

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Speaker 1: and a FED that is going to continue to cut

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Speaker 1: rates over the next twelve months. So I think that's goldilocks.

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Speaker 1: That's that's great for risk assets, great for risk assets.

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Speaker 1: That's kind of where I was going to go, Jeffrey.

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Speaker 5: I'm just wondering how you think our Federal Reserve is

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Speaker 5: going to view this data here this morning before their

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Speaker 5: December eighteenth meeting.

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Speaker 1: Well, I mean they're tasked by Congress with keeping us

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Speaker 1: at full employment, Paul, right, So you know they want

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Speaker 1: to keep that unemployment rate low. They they don't want

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Speaker 1: to risk that it continues to tick up. So I

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Speaker 1: think that's top of mind. The only thing preventing them

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Speaker 1: from focusing on the labor market was inflation. But I

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Speaker 1: think inflation is cool. The pay If I could give

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Speaker 1: a pitch for the paid and regal chart of the

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Speaker 1: week out this morning, I guess you know, we looked,

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Speaker 1: we looked at market based core PCE, and that looks

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Speaker 1: bang on with the Fed's target. You know, it's running

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Speaker 1: at abouzero point two percent month to month for the

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Speaker 1: last four or five months.

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Speaker 3: So that's good enough.

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Speaker 1: Inflation is back to target, So focus on the labor

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Speaker 1: So I think that keeps the FED cutting ball. At

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Speaker 1: the December meeting, we can debate about how much they

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Speaker 1: really need to cut next year. Yeah, they could probably

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Speaker 1: afford to go more slowly, sure, but cutting they will.

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Speaker 4: So Jeffrey, here's the counter. So Tom Gimble, we just

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Speaker 4: talked to him, founder and board member of Lesal Network,

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Speaker 4: was talking about the fact that once the Doge Office

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Speaker 4: or the Department of Government Efficiencies just slashes government workers,

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Speaker 4: all those people are not going to be going to

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Speaker 4: the private sector necessarily, so the unployment rate will rise

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Speaker 4: and the FED is going to need a lot more

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Speaker 4: dry powder to combat that, which means that maybe they

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Speaker 4: don't need to hike anymore right now, sorry, cut anymore

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Speaker 4: right now.

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Speaker 3: What do you make of that argument?

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Speaker 1: Well, I think from the FED essential banker perspective, they're

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Speaker 1: going to say, well, we're going to wait until we

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Speaker 1: see the actual details of any plan to slash spending

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Speaker 1: or cut payrolls. So until we see that we have

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Speaker 1: more definitive details, that's not going to alter the fence plan.

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Speaker 1: The plant is going to look at what's going on

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Speaker 1: with their jrajectory for growth, the unemployment rate right now,

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Speaker 1: and inflation, and then make decisions based on that. My

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Speaker 1: only thing on this Doge thing is that a lot

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Speaker 1: of the government employees are at the state and local level,

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Speaker 1: not as many at the federal level. So I wonder

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Speaker 1: how much, well how much you could really slash and

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Speaker 1: burn there, So that might not I think once people

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Speaker 1: get into office, they might realize the details reality is

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Speaker 1: not quite what they thought it was, and they might

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Speaker 1: be more difficult to make cuts. You know, however motivated

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Speaker 1: they are to make cuts, So I think that's an

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Speaker 1: issue here. We'll have to see how this plays out.

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Speaker 5: TBD, TBD, Jeffrey. So we get this pretty solid labor

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Speaker 5: number here. How do you view the US consumer? It

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Speaker 5: seems like the US consumer hear, she wants a job

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Speaker 5: he or she has it, and wages are going higher,

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Speaker 5: pretty decent, Yeah, I.

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Speaker 1: Mean average AULI earning's ticked up. Paul, you saw that,

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Speaker 1: So that's good. So for US paid in regal view

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Speaker 1: on consumer is look at income growth. If the consumer

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Speaker 1: and aggregate can continues to have income growth, sure there's

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Speaker 1: always pocketed pockets of weaknesses, but overall, aggurate income growth

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Speaker 1: is still humming along at five percent year on year.

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Speaker 1: When you account for you know, what people are being

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Speaker 1: paid and how much they're working, how many people are working.

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Speaker 1: That looks excellent to us. That that's the reason why Paul,

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Speaker 1: in the last eight quarters, US GDP has continued to

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Speaker 1: be two to three percent. Consumer spending has continued to

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Speaker 1: pump along, and it's because of income growth. So I

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Speaker 1: don't see anything in this report that alters our view

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Speaker 1: on that. So that's one of the reasons why we

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Speaker 1: remain bullish on the US economy.

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Speaker 4: All right, so you think the Fed's going to cut

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Speaker 4: then in December, this is all fine enough to do that.

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Speaker 4: Then what as you raised?

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Speaker 1: I think you know, the argument that central bankers would

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Speaker 1: make is that as you get closer to neutral, where

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Speaker 1: you think you'll kind of settle in that you can

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Speaker 1: slow down, so you can as you approach the intersection,

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Speaker 1: if you will, Alex, you know, you maybe you take

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Speaker 1: your foot off the gas a little air and your

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Speaker 1: car hasn't blow it down, right, Yeah, some people just

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Speaker 1: power through. I don't know, but I think that's what

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Speaker 1: they'll do. So, you know, right now we have penciled

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Speaker 1: in four cuts next year, so one per quarter. I

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Speaker 1: think that's a decent starting point at this at this

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Speaker 1: at this juncture. And as you know, if we've been

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Speaker 1: talking for a while now, I've been hawkish most of

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Speaker 1: the last three years, you know, more worried about inflation.

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Speaker 1: So I think this is a sign of paydon you know,

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Speaker 1: being nimble, not being dogmatic. The facts have changed, Inflation

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Speaker 1: is cooled, so the federal be cutting over the next

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Speaker 1: twelve months.

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Speaker 5: Jeffrey, thank you so much for joining us. Always appreciate

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Speaker 5: getting a few minutes sorry times, particularly on these job

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Speaker 5: stays at Jeffrey Cleveland. He's a chief economists at Peydon

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Speaker 5: and Regal. He's out there in LA and joining us

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Speaker 5: via zoom.

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Speaker 2: Here you're listening to the Bloomberg Intelligence Podcast. Catch us

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Speaker 2: live weekdays at ten am Eastern on applecard Play and

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Speaker 2: Android Auto with a Bloomberg Business app. You can also

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Speaker 2: Just Say Alexa, playing Bloomberg eleven thirty.

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Speaker 5: One of the themes that Alex I like to stay

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Speaker 5: on top of. On a kind of a continue spaces.

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Speaker 5: Is commercial real estate in this country had such a

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Speaker 5: challenge like many other industries and people did during the pandemic.

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Speaker 5: It's recovering different parts of commercial real estate recovering at

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Speaker 5: a different pace. One of the ones that's really really tough,

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Speaker 5: and particularly for those in larger markets, is office real estate.

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Speaker 5: Lisa Knee joins Hiss here. She's a managing partner and

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Speaker 5: head of real estate at Eisner Amper. She's here in

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Speaker 5: our Bloomberg Interactive Broker studio. Lisa talk to us about

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Speaker 5: the office real estate market. Have we I've started to

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Speaker 5: see some stories about some Marquey properties in top ten

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Speaker 5: markets starting to trade.

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Speaker 3: That's the good news to bed news.

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Speaker 5: Is at huge, huge discounts forty fifty sixty percent discounts

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Speaker 5: to pre pandemic levels. Where's the office real estate market

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Speaker 5: in this country do you think today?

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Speaker 3: Well, thank you for having me. So the office still remains.

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Speaker 3: If it's a Class A, those properties are still aring

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Speaker 3: very very well.

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Speaker 8: So it's trying to see which which of the what

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Speaker 8: sectors in the market and which type of classes the property.

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Speaker 8: So some of the Class C properties that you're going

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Speaker 8: to see that's really what a lot of the things

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Speaker 8: you're reading about. I read about some stuff this week

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Speaker 8: in the New York City marketplace as well for office,

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Speaker 8: and so looking also when people are is this ripe

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Speaker 8: for the conversion to rental, what are we going to

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Speaker 8: do with this?

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Speaker 3: What is that office?

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Speaker 8: And how much money does it take to actually go

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Speaker 8: in and either take out the loan or even fix

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Speaker 8: the property.

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Speaker 3: And so office is still going to remain a little bit.

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Speaker 8: You know, the CBS report came out that it was

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Speaker 8: a ten percent delinquency rate, which is pretty high for office,

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Speaker 8: and they were slated that they expected that to happen

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Speaker 8: months ago. So it's taken a while for the delinquency

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Speaker 8: rates on the office to generally creep up there.

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Speaker 3: But I think people are still looking at it as

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Speaker 3: a little bit of a concern and looking.

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Speaker 8: To sort of say, where the opportunities out there, whether

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Speaker 8: it's the conversions, whether it's now time to retrade and

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Speaker 8: think about repricing the office market. Hopefully there's going to

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Speaker 8: be somewhat of a mandate for return to office, so

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Speaker 8: that we look around.

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Speaker 3: This place is always bustling, but there are a lot

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Speaker 3: of offices that.

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Speaker 8: Are still quite empty and how are employer is going

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Speaker 8: to be mandating those?

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Speaker 4: So for the Class C office space, what happens to

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Speaker 4: those buildings? C?

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Speaker 3: Class C? What did I say?

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Speaker 5: xCE But that's like that's not good right right?

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Speaker 3: But yeah, like what is that?

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Speaker 4: Can you give us some like broad examples of what

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Speaker 4: that would look like and then what happens to that

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Speaker 4: real esty?

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Speaker 8: Yeah, so that would be older stock that could be

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Speaker 8: in Manhattan or in any city around the country that

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Speaker 8: probably needs a lot of work to renovate it to

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Speaker 8: get it to where the amenities that you guys have

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Speaker 8: such a Bloomberger some of the even where our offices

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Speaker 8: are now, So people are looking for those amenities to

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Speaker 8: get them to a Class A building. That's a lot

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Speaker 8: of capital that needs to be infused in that. So

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Speaker 8: people want that a little bit more of an experience

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Speaker 8: in the office. There's more focus on health than feeling

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Speaker 8: good about where you are. Those Class c's are probably

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Speaker 8: forty to fifty years old and don't have that feeling

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Speaker 8: in that look.

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Speaker 5: But that I'm thinking anything but Class A in this

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Speaker 5: marketplace in New York City, I'm thinking that's seventy percent

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Speaker 5: of the square footage.

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Speaker 3: I mean, it's a ton.

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Speaker 5: I look at every building up and down Third Avenue,

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Speaker 5: every building up and down lower Park Avenue, like Park

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Speaker 5: Avenue just above Grand Central Station was in the news

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Speaker 5: this week. I think you know that's got marked down

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Speaker 5: below the value the mortgage. I mean, there's so much

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Speaker 5: of that square footage in the city. Nothing's happening to that.

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Speaker 5: So you can't renovate that stuff, can you?

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Speaker 8: So a lot of it that So you're also looking

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Speaker 8: at external renovations versus internal and recreating that space for

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Speaker 8: the tenant experience, and so a lot of it can

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Speaker 8: get changed internally for the tenant and even the lobbies.

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Speaker 3: So yeah, you're not going to have the glass windows.

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Speaker 8: And the beautiful outside facade, but interior for the tenant improvements,

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Speaker 8: you can make those changes to make it more palatable

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Speaker 8: for the consumer.

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Speaker 3: To use that party.

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Speaker 4: Again, to your point, it's still expensive to do that.

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Speaker 4: And also we don't know what the return to office, Mandy,

440
00:20:42,000 --> 00:20:43,800
Speaker 4: it's going to be for that to do.

441
00:20:44,160 --> 00:20:44,600
Speaker 8: So if.

442
00:20:46,160 --> 00:20:47,800
Speaker 3: What's like the next solution, So.

443
00:20:47,960 --> 00:20:49,960
Speaker 4: If there's not the money to kind of renovate it, right,

444
00:20:50,160 --> 00:20:51,920
Speaker 4: does it just go to the bank, does it go

445
00:20:52,000 --> 00:20:52,439
Speaker 4: belly up?

446
00:20:52,600 --> 00:20:53,320
Speaker 3: What happens to it.

447
00:20:53,480 --> 00:20:56,399
Speaker 8: So we read there's a very large, too large developers

448
00:20:56,560 --> 00:20:59,520
Speaker 8: in New York that are taking a platform they just

449
00:20:59,560 --> 00:21:02,320
Speaker 8: started on nationally that they're going to convert some of

450
00:21:02,400 --> 00:21:03,639
Speaker 8: these offices to residential.

451
00:21:04,000 --> 00:21:05,920
Speaker 3: Now, we've been reading about this a lot, and you'll

452
00:21:05,960 --> 00:21:06,080
Speaker 3: have a.

453
00:21:06,080 --> 00:21:08,320
Speaker 8: Lot of people talking about the negatives to positive but

454
00:21:08,400 --> 00:21:11,560
Speaker 8: these are experienced developers who have already created some of

455
00:21:11,640 --> 00:21:14,359
Speaker 8: that conversion from office to residential. So not all of

456
00:21:14,400 --> 00:21:16,359
Speaker 8: the stock will convert, but some of it will really

457
00:21:16,400 --> 00:21:19,080
Speaker 8: really successfully with the right developer, and that's a really

458
00:21:19,160 --> 00:21:22,440
Speaker 8: exciting thing, and that would be across nationwide. It's not, again,

459
00:21:22,480 --> 00:21:24,640
Speaker 8: it's not one hundred percent solution, but it's a really

460
00:21:24,760 --> 00:21:27,480
Speaker 8: nice type of solution for those types of assets out there.

461
00:21:27,800 --> 00:21:31,400
Speaker 5: What's happening with I guess commercial real estate mortgages as

462
00:21:31,560 --> 00:21:35,040
Speaker 5: they mature and now I got a comeback and rates

463
00:21:35,080 --> 00:21:37,560
Speaker 5: are so much higher and my loan to value ratio

464
00:21:37,640 --> 00:21:40,199
Speaker 5: is all screwed up now, so I need new equity.

465
00:21:40,280 --> 00:21:41,920
Speaker 3: What happens to those types of situations?

466
00:21:41,960 --> 00:21:42,840
Speaker 5: What are we seeing out there?

467
00:21:43,440 --> 00:21:46,480
Speaker 8: Yeah, so we just saw this past week Valley National

468
00:21:47,119 --> 00:21:51,760
Speaker 8: solo a billion dollar portfolio of their loans to Brookfield

469
00:21:52,040 --> 00:21:53,359
Speaker 8: and so those are positive things.

470
00:21:53,280 --> 00:21:55,399
Speaker 3: When sales like that can happen and they sell at

471
00:21:55,440 --> 00:21:58,280
Speaker 3: a super It was a very slight discount, so that's light.

472
00:21:58,480 --> 00:22:00,720
Speaker 3: So this was good. This was good, and Valley National

473
00:22:00,800 --> 00:22:01,679
Speaker 3: is going to retain.

474
00:22:01,560 --> 00:22:03,840
Speaker 8: Servicing those loans, so they just really wanted it off

475
00:22:03,840 --> 00:22:05,880
Speaker 8: their balance sheet and Brickfield's going to take that over.

476
00:22:06,400 --> 00:22:10,240
Speaker 8: Deutsche Bank the billion dollar portfolio of THEIRS, which was unique,

477
00:22:10,240 --> 00:22:13,320
Speaker 8: and why that's good news is that that portfolio had

478
00:22:13,320 --> 00:22:14,920
Speaker 8: a lot of office in there. So the fact that

479
00:22:15,000 --> 00:22:18,560
Speaker 8: that was able to trade and close, that's really optimistic.

480
00:22:18,080 --> 00:22:20,480
Speaker 3: When you look at it. So have we reached our floor?

481
00:22:20,760 --> 00:22:22,320
Speaker 3: We are we in a stable environment?

482
00:22:22,560 --> 00:22:25,280
Speaker 8: Looking at those billion dollar transactions, you know, one of

483
00:22:25,280 --> 00:22:27,280
Speaker 8: those would have been a highlight reel from the news.

484
00:22:27,520 --> 00:22:29,399
Speaker 8: Two happening in a week, or three even happening in

485
00:22:29,440 --> 00:22:31,480
Speaker 8: a week, that shows that there is movement and that

486
00:22:31,560 --> 00:22:33,600
Speaker 8: there is some activity there.

487
00:22:33,920 --> 00:22:35,639
Speaker 3: To your port on rates and what's.

488
00:22:35,520 --> 00:22:37,520
Speaker 8: Going to happen, you know, we think the Feds are

489
00:22:37,520 --> 00:22:40,879
Speaker 8: going to cut again this month, and so consumers are

490
00:22:41,640 --> 00:22:44,760
Speaker 8: looking on the sidelines and figuring out the money's out there.

491
00:22:45,240 --> 00:22:47,800
Speaker 3: It's just nobody likes the prices and the rates. Right,

492
00:22:47,880 --> 00:22:48,920
Speaker 3: of course, the money's there.

493
00:22:49,160 --> 00:22:51,399
Speaker 4: Yeah, got to get the bid, ask you got to

494
00:22:51,400 --> 00:22:52,639
Speaker 4: get it just to come in and how long that

495
00:22:52,720 --> 00:22:53,320
Speaker 4: winds up taking?

496
00:22:53,520 --> 00:22:54,200
Speaker 5: Cry? Let you go.

497
00:22:54,320 --> 00:22:56,920
Speaker 3: How's Boston right now? So interesting?

498
00:22:57,080 --> 00:22:59,640
Speaker 8: Boston is an interesting market when you when you look

499
00:22:59,720 --> 00:23:02,199
Speaker 8: at it, we're reading about it in the papers. It's

500
00:23:02,280 --> 00:23:04,639
Speaker 8: a little bit slower to get back to where some

501
00:23:04,720 --> 00:23:07,160
Speaker 8: of the other cities are doing. I went to school

502
00:23:07,160 --> 00:23:09,720
Speaker 8: in Boston, so it's kind of close to my heart,

503
00:23:09,920 --> 00:23:12,000
Speaker 8: but it is a little bit slower to get back,

504
00:23:12,000 --> 00:23:14,560
Speaker 8: both on the residential and on the office commercial side,

505
00:23:14,960 --> 00:23:16,879
Speaker 8: to where some of the other cities we're seeing have

506
00:23:17,000 --> 00:23:18,200
Speaker 8: rebounded a little bit quicker.

507
00:23:18,880 --> 00:23:21,040
Speaker 5: All right, and good stuff, Lisai, thank you so much

508
00:23:21,080 --> 00:23:23,480
Speaker 5: for joining us, Lisa to He's a managing partner and

509
00:23:23,600 --> 00:23:26,159
Speaker 5: head of real estate for Eisner Amper joining us here

510
00:23:26,160 --> 00:23:28,359
Speaker 5: in our Bloomberg Interactive Broker studio. I like to think

511
00:23:28,400 --> 00:23:29,760
Speaker 5: we're in a A plus.

512
00:23:30,080 --> 00:23:31,680
Speaker 1: Oh my god, yeah, we're light.

513
00:23:31,600 --> 00:23:32,359
Speaker 3: A plus plus.

514
00:23:32,440 --> 00:23:34,920
Speaker 4: Everyone's jealous of our snacks and you should have seen it, Lisa.

515
00:23:34,960 --> 00:23:37,160
Speaker 4: We had a whole Christmas fair in the last few days.

516
00:23:37,680 --> 00:23:41,560
Speaker 3: It was jamming upstairs. This was snackflow was unbelievable.

517
00:23:41,680 --> 00:23:43,880
Speaker 5: So yeah, Bloombergs. They figured out this get people back

518
00:23:43,920 --> 00:23:45,840
Speaker 5: to the office kind of thing, so it's all working out.

519
00:23:46,160 --> 00:23:50,679
Speaker 2: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

520
00:23:50,880 --> 00:23:53,760
Speaker 2: and anywhere else you will get your podcasts. Listen live

521
00:23:53,880 --> 00:23:57,280
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522
00:23:57,560 --> 00:24:00,280
Speaker 2: the iHeart Radio app tune In, and the Bloue Bomberg

523
00:24:00,359 --> 00:24:03,440
Speaker 2: Business app. You can also watch us live every weekday

524
00:24:03,520 --> 00:24:06,080
Speaker 2: on YouTube and always on the Bloomberg Journal