WEBVTT - Bloomberg Businessweek Weekend - February 16th, 2024 0:00:02.640 --> 0:00:07.960 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.840 --> 0:00:13.239 This is Bloomberg business Week Inside from the reporters and 0:00:13.400 --> 0:00:17.000 editors who bring you America's most trusted business magazine, plus 0:00:17.040 --> 0:00:21.160 global business, finance and tech news. The Bloomberg Business Week 0:00:21.200 --> 0:00:26.160 Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:27.560 --> 0:00:31.160 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:31.480 --> 0:00:34.040 It may have been a chilly January outside in much 0:00:34.040 --> 0:00:37.800 of the country, but you know what wasn't called US inflation. 0:00:38.320 --> 0:00:41.479 The Consumer Price Index rose by more than forecast across 0:00:41.520 --> 0:00:44.800 the board in January on a monthly and annual basis, 0:00:45.159 --> 0:00:47.400 as did the core measures, which strip out food and 0:00:47.479 --> 0:00:50.560 energy costs, and with employers also adding three hundred and 0:00:50.560 --> 0:00:55.240 fifty thousand jobs last month, again exceeding all estimates. Well, 0:00:55.400 --> 0:00:57.680 that has led to some rethinking when the FED is 0:00:57.720 --> 0:00:59.800 going to cut rates this year. That said, we also 0:00:59.840 --> 0:01:02.680 got data that supports those thinking about the FED cutting 0:01:02.760 --> 0:01:06.200 rates sooner than later. US retail sales broadly declined in January, 0:01:06.319 --> 0:01:09.800 the biggest drop in nearly a year. Treasury Secretary Jennet 0:01:09.840 --> 0:01:12.440 Yellen this past week showed her comments on the CPI, 0:01:12.920 --> 0:01:16.520 saying that she still sees continued progress in bringing inflation down, 0:01:17.000 --> 0:01:19.679 though she did address one of the more worrying components 0:01:19.680 --> 0:01:23.240 of the report, shelter costs. Today, on the program, we 0:01:23.280 --> 0:01:25.920 take a step back to focus on everything real estate, 0:01:26.280 --> 0:01:28.959 from apartments bought with cash in New York City to 0:01:29.040 --> 0:01:33.080 commercial real estate, student housing, storage units, and more. So, 0:01:33.160 --> 0:01:35.440 let us begin by taking a moment to think about 0:01:35.760 --> 0:01:38.960 your life. Thinking about your daily routine and the built 0:01:39.040 --> 0:01:42.920 environment that you interact with, your office or workspace, the roads, 0:01:42.959 --> 0:01:46.760 the parks, public transit, all of the infrastructure that's around you, 0:01:47.319 --> 0:01:50.240 and equally important, what you find on the other side 0:01:50.240 --> 0:01:53.000 of the doorways that you walk through. Maybe it's just me, 0:01:53.120 --> 0:01:55.160 but these things have a huge effect on my life 0:01:55.360 --> 0:01:58.960 and my well being. For our next guests, this is 0:01:59.000 --> 0:02:02.000 their world. Andy Cohen and Diane Hoskins are the co 0:02:02.120 --> 0:02:05.919 CEOs of the privately held global architecture design and planning 0:02:05.920 --> 0:02:09.079 firm Gensler. Gensler has more than fifty locations and six 0:02:09.120 --> 0:02:11.880 thousand employees around the world in the America's euro Up, 0:02:11.880 --> 0:02:15.240 Greater China, Asia, Pacific, and the Middle East. Gensler does 0:02:15.240 --> 0:02:17.480 more than two billion dollars a year in revenue and 0:02:17.520 --> 0:02:20.160 counts eighty percent of the top fifty Fortune five hundred 0:02:20.160 --> 0:02:24.880 companies as clients. Terminal One at JFK, Invidios Corporate headquarters 0:02:24.880 --> 0:02:28.239 in Silicon Valley, Shanghai Tower, the tallest building in China, 0:02:28.800 --> 0:02:31.640 m and T Bank Stadium in Baltimore. These are among 0:02:31.680 --> 0:02:34.920 the thousands of Gensler projects around the world. Andy Cohen 0:02:34.960 --> 0:02:36.760 and Dian Hoskins are also the co authors of a 0:02:36.800 --> 0:02:39.680 new book. It's called Design for a Radically Changing World. 0:02:39.880 --> 0:02:41.880 They joined us in our New York City studio. 0:02:42.160 --> 0:02:47.080 We're in a world where new cities are being created 0:02:47.360 --> 0:02:50.040 I won't say overnight, but you know, again at such 0:02:50.040 --> 0:02:53.400 a rapid pace. You know, we were just in India 0:02:54.000 --> 0:02:56.840 and you know, to see the kind of energy and 0:02:56.880 --> 0:03:00.600 excitement going on and the transformation that we're part of 0:03:00.840 --> 0:03:03.840 as a design firm in Bangalore. We were just in 0:03:03.880 --> 0:03:07.400 Mexico City hearing a lot about the near shoring and 0:03:07.480 --> 0:03:11.640 the energy that that's bringing to the economy there and 0:03:11.680 --> 0:03:15.680 obviously opportunities in the built environment as well. So you know, 0:03:15.720 --> 0:03:19.080 again as a global firm, we're part of this transformation 0:03:19.240 --> 0:03:22.360 that is literally happening, you know, around the world. We 0:03:22.400 --> 0:03:26.360 were at COP twenty eight and in Dubai and you know, 0:03:26.440 --> 0:03:29.360 again all of what's happening in the Middle East. So, 0:03:29.720 --> 0:03:33.359 you know, the United States, there's amazing things happening that 0:03:33.440 --> 0:03:36.800 hopefully we'll talk about as our cities are you know, 0:03:37.160 --> 0:03:38.320 finding their path. 0:03:38.760 --> 0:03:40.880 But we're very bullish, wells safe to say we have 0:03:40.880 --> 0:03:43.240 a sensitivity about cities too, and we think it's really 0:03:43.280 --> 0:03:45.320 important that if you have healthy cities, you have healthy 0:03:45.360 --> 0:03:48.920 countries and healthy policies. Like it kind of starts at 0:03:48.920 --> 0:03:51.000 that level, but I want to dig a little bit deeper, Andy, 0:03:51.240 --> 0:03:54.920 because you guys do have this incredible global perspective. Any 0:03:55.120 --> 0:04:00.160 signs that there are companies are you know, cities slowing 0:04:00.200 --> 0:04:03.000 down on projects because of uncertainty about. 0:04:02.760 --> 0:04:05.080 What's to come again, like Diane said, it's where we 0:04:05.120 --> 0:04:07.400 have this global perspective. We worked in over one hundred 0:04:07.440 --> 0:04:11.000 countries last year. You know, we're seeing the US right 0:04:11.040 --> 0:04:13.880 now in definitely in the work sector, in the office 0:04:13.880 --> 0:04:16.840 sector definitely slowing down. You know, we're in four sectors 0:04:16.880 --> 0:04:19.839 in our firm. We have work, lifestyle, what we call cities, 0:04:19.839 --> 0:04:23.400 and health and wellness. We're seeing our work sector definitely 0:04:23.440 --> 0:04:25.679 being hit right now with the slowdown in office although 0:04:25.680 --> 0:04:29.799 we're doing a ton of office to RESI residential conversions 0:04:29.839 --> 0:04:31.960 right now. Are you really a ton of those right 0:04:32.120 --> 0:04:36.799 like old office buildings, older office buildings. What we're seeing 0:04:36.920 --> 0:04:41.120 is because office buildings right now they're only fifty percent occupied. 0:04:41.520 --> 0:04:45.000 We're seeing this unbelievable flight to quality that's going on 0:04:45.120 --> 0:04:47.560 right now where tenants really only want to be in 0:04:47.640 --> 0:04:51.120 highly amenditized quality buildings that are brand new or newer. 0:04:51.680 --> 0:04:54.920 And the older building stock millions upon millions of square 0:04:54.960 --> 0:04:58.760 feet what we call B and C product are B 0:04:58.800 --> 0:05:02.760 and C buildings are a really, really problematic. So we 0:05:02.839 --> 0:05:06.840 have done we created an algorithm recently that we're able 0:05:06.880 --> 0:05:10.880 to study entire cities or whole portfolios of buildings and 0:05:10.960 --> 0:05:15.120 analyze them quickly to see which buildings can be converted 0:05:15.640 --> 0:05:20.000 from office to REZI and about twenty five percent of 0:05:20.040 --> 0:05:22.320 the building stock in the United States and around the 0:05:22.320 --> 0:05:23.880 globe can be converted. 0:05:24.160 --> 0:05:27.840 Diana, How I mean we've heard for years since the 0:05:27.880 --> 0:05:31.520 pandemic that oh, it's just too expensive to convert on 0:05:31.600 --> 0:05:35.200 a large scale old office buildings into housing. I mean, 0:05:35.279 --> 0:05:37.800 think about it from the perspective of the plumbing, and 0:05:37.920 --> 0:05:40.160 there's some lack of windows. I mean how do you 0:05:40.200 --> 0:05:42.400 do this efficiently? Is it something that is realistic to 0:05:42.440 --> 0:05:43.960 do to offices that aren't used? 0:05:44.520 --> 0:05:47.080 Yeah, as Andy said, we've created a tool where we 0:05:47.120 --> 0:05:49.560 can answer that question really quickly. 0:05:49.720 --> 0:05:51.320 So some buildings, it works in some buildings. 0:05:51.480 --> 0:05:53.880 Yeah, I mean that tool. Yeah, what is it? No, 0:05:53.960 --> 0:05:58.279 it's you know, we've put together basically. 0:05:57.839 --> 0:06:00.920 A way of bringing all the analytics that would probably 0:06:00.960 --> 0:06:04.240 take you know, a pretty extended period of time to 0:06:04.320 --> 0:06:08.839 study into a very concise set of metrics that predict 0:06:09.360 --> 0:06:13.880 the viability of an office building becoming residential. So the 0:06:13.920 --> 0:06:17.920 window to the core, you know that dimension. Obviously, super 0:06:18.000 --> 0:06:20.719 deep apartments are not going to work. You know, the 0:06:20.800 --> 0:06:24.240 Florida floor height again, you know there are ideal Florida 0:06:24.240 --> 0:06:27.599 floor heights for residential that are different in many cases 0:06:27.640 --> 0:06:31.440 than office. The loading dock, by the way, makes a 0:06:31.520 --> 0:06:34.760 huge difference. What's going on with you know, the column base. 0:06:35.080 --> 0:06:39.479 So all of this basically we do a scoring and literally, 0:06:39.480 --> 0:06:42.159 if it's eighty or above, it's viable. If it's below, 0:06:42.480 --> 0:06:43.360 maybe not so much. 0:06:43.400 --> 0:06:46.760 And you said that algorithm says twenty five percent can 0:06:46.800 --> 0:06:49.080 be reworked, which makes me think that other seventy five 0:06:49.080 --> 0:06:51.200 percent do you think ultimately it's just going to have 0:06:51.240 --> 0:06:54.520 to be either torn down or done away with. 0:06:55.080 --> 0:06:57.560 Well, we're doing a lot of adaptive reuses right now 0:06:57.560 --> 0:07:00.280 to other types of uses, but definitely be the reason 0:07:00.320 --> 0:07:03.479 why we're studying residential is such as short as a 0:07:03.520 --> 0:07:06.880 residential and so we need more residential and this is 0:07:07.160 --> 0:07:09.760 a sustainable way of doing it. Instead of ripping a 0:07:09.800 --> 0:07:12.800 building down, we can reuse the building, which is so 0:07:12.960 --> 0:07:15.720 much better for the environment. I should also add, Diana 0:07:15.720 --> 0:07:17.840 and I just went this morning. We saw a project 0:07:17.880 --> 0:07:21.120 called a Pearl House and it's here in Lower Manhattan. 0:07:21.360 --> 0:07:26.280 It's the first unbelievable successful conversion from office to REZI 0:07:26.800 --> 0:07:29.560 and it was a building built in nineteen seventy and 0:07:29.600 --> 0:07:31.800 we were able to literally turner it inside out and 0:07:31.840 --> 0:07:35.120 turn it from a standard office building into residential and 0:07:35.160 --> 0:07:36.680 we think it's going to be a home run here 0:07:36.680 --> 0:07:37.200 in New York. 0:07:38.160 --> 0:07:41.080 It's really cool to hear about this because again again 0:07:41.200 --> 0:07:43.240 it's like we've heard about we've been talking about this 0:07:43.280 --> 0:07:45.640 for years, and it's like it's good to finally see 0:07:45.640 --> 0:07:50.840 this happening. So, Diane, how susceptible is Gensler II blips 0:07:50.840 --> 0:07:53.280 in the economy, Because the reason I ask it's and 0:07:53.280 --> 0:07:55.280 I don't think it's an obvious answer. Is because yes, 0:07:55.360 --> 0:07:58.160 a big portion of your revenue does come from offices, 0:07:58.200 --> 0:08:02.120 but also a lot comes from municipal municipalities. You do airports, 0:08:02.240 --> 0:08:05.680 courthouse renovations, parliament. So how much of that is dependent 0:08:05.760 --> 0:08:07.880 on you know, fluctuations within the global economy. 0:08:08.400 --> 0:08:08.640 Yeah. 0:08:08.800 --> 0:08:11.160 You know, over the last twenty years where we've been 0:08:11.320 --> 0:08:16.520 co CEOs, we've really focused on diversification and really looking 0:08:16.560 --> 0:08:19.800 at all of the kind of a three sixty from 0:08:20.040 --> 0:08:22.320 as Andy said, sort of this work sector which we've 0:08:22.360 --> 0:08:24.640 been talking about, that's the office buildings and then the 0:08:24.680 --> 0:08:27.960 spaces inside those buildings. But even that is like, you know, 0:08:28.040 --> 0:08:30.520 you've got tech, and you've got financial services and you know, 0:08:30.640 --> 0:08:34.640 professional services. But you know, right now one of our 0:08:34.679 --> 0:08:39.840 fastest growing practice areas is actually aviation. And you know, 0:08:39.920 --> 0:08:43.240 you look at the stimulus, the you know, infrastructure bill 0:08:43.360 --> 0:08:46.200 that got passed not that long ago. You're starting to 0:08:46.280 --> 0:08:50.400 see amazing projects going on all over the US in 0:08:50.520 --> 0:08:54.000 terms of these you know, much needed new terminals. We 0:08:54.080 --> 0:08:56.760 all go you know, overseas and see great terminals, but 0:08:56.800 --> 0:09:00.439 we're starting to see some amazing opportunities. 0:08:59.800 --> 0:09:00.760 Here in the US. 0:09:00.840 --> 0:09:05.160 So you know again that diversification, whether it's another massive 0:09:05.200 --> 0:09:08.840 growth area for US is sports stadiums. And you know, 0:09:09.720 --> 0:09:12.040 again we all saw the Super Bowl, but you know 0:09:12.480 --> 0:09:16.360 it's so important in our communities to you know, entertainment 0:09:16.360 --> 0:09:19.720 in sports as well. So you know, the and let's 0:09:19.720 --> 0:09:23.400 say hospitality. I mean again since COVID, we all know, 0:09:23.559 --> 0:09:26.640 the hospitality sector has been just on a rocket and 0:09:26.760 --> 0:09:29.839 that reflects also back into the work that we're doing. 0:09:30.000 --> 0:09:31.840 I want to go right to one called social and 0:09:31.920 --> 0:09:35.280 racial justice because I think about how we have done 0:09:35.440 --> 0:09:40.640 in general housing for decades and kind of separating lower 0:09:40.679 --> 0:09:43.400 income and then developers maybe they throw a few units 0:09:43.480 --> 0:09:45.440 like how do we do and Diane, let me start 0:09:45.440 --> 0:09:46.480 with you, how do we do this better? 0:09:46.760 --> 0:09:51.320 Yeah, you know, it's about equity, right for so many years, 0:09:51.480 --> 0:09:53.959 you know, and in so many of our cities there 0:09:53.960 --> 0:09:57.920 are communities that just haven't had the investment. And so 0:09:58.200 --> 0:10:01.880 you know, at Gensler, we're really being mindful about seeking 0:10:01.960 --> 0:10:07.280 out opportunities to work on projects that are helping to 0:10:07.400 --> 0:10:13.160 create more livable streets, more green space, you know, helping 0:10:13.200 --> 0:10:16.880 to create schools that are exciting children to want to 0:10:16.960 --> 0:10:19.400 learn and grow, but. 0:10:18.840 --> 0:10:21.360 For not just one member of the social strata. 0:10:21.400 --> 0:10:25.640 Correct, yeahat for everyone, for everyone, and it's it is 0:10:25.679 --> 0:10:28.480 about equity and how do we bring that through design? 0:10:28.720 --> 0:10:33.040 Andy, You and Diane argue that design can be a 0:10:33.040 --> 0:10:39.000 more powerful tool than policy when it comes to changing 0:10:39.000 --> 0:10:39.880 cities for the better. 0:10:40.600 --> 0:10:44.000 Explain, well, sure, I think first let's talk about the context. 0:10:44.200 --> 0:10:47.079 For the first time in human history, more people live 0:10:47.120 --> 0:10:49.800 in cities than not. Fifty five percent of the world's 0:10:49.840 --> 0:10:53.480 population lives in cities, and by twenty fifty seventy percent 0:10:53.520 --> 0:10:57.280 of the world's populations lives in cities. So the design 0:10:57.320 --> 0:10:59.280 of cities are obviously going to be really important for 0:10:59.320 --> 0:11:03.120 the global population. And we believe and this has to 0:11:03.160 --> 0:11:06.679 do with policies moving forward. We believe in the philosophy 0:11:06.840 --> 0:11:10.440 and through our research of a twenty minute city and 0:11:10.480 --> 0:11:13.319 the twenty minute city, and we learned this through COVID, 0:11:13.960 --> 0:11:16.800 is that everything is walkable. Everything you need in life, 0:11:17.000 --> 0:11:22.800 every amenity that you need in life is walkable. Grocery stores, restaurants, retail, healthcare, 0:11:23.480 --> 0:11:26.600 education is older than a walkable district. Now, in a 0:11:26.880 --> 0:11:29.160 small city that would be twenty minutes. In a city 0:11:29.320 --> 0:11:33.280 like New York, you might have multiple twenty minute cities. 0:11:33.520 --> 0:11:37.200 But this philosophy of access and amenities, even having to 0:11:37.200 --> 0:11:40.680 do with racial justice, is the idea that you have 0:11:40.720 --> 0:11:44.160 these amenities that your fingertips, and about that design can 0:11:44.200 --> 0:11:46.000 make a difference in our world. 0:11:46.080 --> 0:11:48.160 How do you make sure it's affordable amenities that are 0:11:48.160 --> 0:11:50.800 within everybody's reach, because that maybe is not always I 0:11:50.840 --> 0:11:54.800 don't know if that's within design you know capabilities, or 0:11:54.920 --> 0:11:56.920 is it like how do you work that in as well. 0:11:57.720 --> 0:12:00.640 Again, at the end of the day, design isn't about 0:12:00.679 --> 0:12:03.280 the price tag. It's about the decisions that we make 0:12:03.320 --> 0:12:06.920 as designers. Where to put, you know, the green space, 0:12:07.040 --> 0:12:09.800 where to put you know, instead of a wall, maybe 0:12:09.800 --> 0:12:13.080 it's it's shrubbery, or maybe it's the way that you 0:12:13.160 --> 0:12:15.640 move from one space to the other instead of something 0:12:15.679 --> 0:12:19.080 that's very rigid and kind of onerous. You know, it's 0:12:19.120 --> 0:12:22.400 about experience, and you know, at the end of the day, 0:12:23.120 --> 0:12:26.920 you know, design is about a you know, a thousand 0:12:26.960 --> 0:12:30.839 different choices we make with the design problem. And again 0:12:30.920 --> 0:12:33.520 I go back to it's what we focus on, you know, 0:12:33.600 --> 0:12:36.800 it's what we focus on. Design is for every neighborhood 0:12:36.840 --> 0:12:37.720 in a city. 0:12:37.720 --> 0:12:40.000 But our client's all sensitive to that. I mean, I 0:12:40.040 --> 0:12:43.199 do always wonder, especially if it's a tougher economic environment, right, Tim, 0:12:43.200 --> 0:12:45.400 and I constantly here we are going through earning still 0:12:45.960 --> 0:12:48.640 and it's you know the bottom line, and you know 0:12:48.760 --> 0:12:51.080 what gets a stock moving, it's a buyback. Sometimes there 0:12:51.200 --> 0:12:54.200 a dividend or cost cuts in these you know, thank you, 0:12:54.240 --> 0:12:57.800 Mark Zuckerberg. The year of efficiency continues for many. So Andy, 0:12:57.800 --> 0:12:59.360 come on in on this, Like when you guys are 0:12:59.360 --> 0:13:02.440 working on a pro how important is it that it's 0:13:02.880 --> 0:13:09.240 access for most How do you incorporate climate change aspects? 0:13:09.280 --> 0:13:10.719 How do you do it make it green or make 0:13:10.720 --> 0:13:11.439 it better. 0:13:11.760 --> 0:13:12.480 For our clients? 0:13:12.520 --> 0:13:13.400 They're looking for it all. 0:13:13.440 --> 0:13:15.040 They want to mark they really they want to make 0:13:15.080 --> 0:13:17.320 sure that it's equitable, but they also want to make 0:13:17.320 --> 0:13:22.640 sure that it's financial financial, and so we're constantly balancing 0:13:22.679 --> 0:13:25.400 the two. And I'll talk about housing for a second. 0:13:25.400 --> 0:13:28.040 We do a lot of housing, and much of the 0:13:28.080 --> 0:13:32.120 housing today about every project ten to twenty percent is 0:13:32.160 --> 0:13:35.240 affordable housing that's being factored into the performance. 0:13:35.320 --> 0:13:36.880 Is that more than has been in the past. 0:13:36.880 --> 0:13:37.439 Absolutely? 0:13:37.559 --> 0:13:42.400 Okay, most projects residential products would have zero affordable and now, 0:13:43.760 --> 0:13:47.120 based on the demographics of the community, developers are building 0:13:47.160 --> 0:13:49.839 that into their performer and make it work, and that 0:13:49.880 --> 0:13:53.840 gives us the ability to create equality and design, to 0:13:53.840 --> 0:13:55.280 make sure that designs for everyone. 0:13:56.720 --> 0:13:59.880 Diane Andy mentioned climate change, and I'm curious how you 0:13:59.920 --> 0:14:03.480 do design in a world where extreme weather events are 0:14:03.480 --> 0:14:07.360 happening more frequently beyond just putting everything on stilts, because 0:14:07.960 --> 0:14:09.520 that's certainly one way to do it. But is that 0:14:09.559 --> 0:14:11.520 I mean, is that the is that like the only 0:14:11.559 --> 0:14:14.800 option for low lying environments or even lower Manhattan or 0:14:15.040 --> 0:14:16.000 Red Hook and Brooklyn. 0:14:16.320 --> 0:14:18.360 Do you need develop Well, look, you put your finger 0:14:18.440 --> 0:14:21.480 on probably the most critical issue of our time, which 0:14:21.520 --> 0:14:25.000 is climate change, and this is impacting all aspects of 0:14:25.040 --> 0:14:29.360 the built environment. You know, forty percent of global emissions 0:14:29.360 --> 0:14:32.760 and CO two are from buildings. Yeah, I mean, it's 0:14:32.800 --> 0:14:36.240 a huge issue. It's both how we make the buildings, 0:14:36.320 --> 0:14:39.080 the town and steel and all of that. So this 0:14:39.160 --> 0:14:44.080 whole idea of you know, adaptive reuse, that's that's really 0:14:44.120 --> 0:14:46.920 literally we can cut in half the amount of emissions 0:14:46.920 --> 0:14:50.160 from our buildings if we can reuse buildings, so that's 0:14:50.200 --> 0:14:52.680 a big piece. And then of course creating efficiency in 0:14:52.720 --> 0:14:55.640 our buildings, So you know, that's one piece of it. 0:14:55.680 --> 0:14:59.080 And you're bringing up resiliency and the point there is 0:14:59.120 --> 0:15:01.320 that we have to think about the climate not just 0:15:01.400 --> 0:15:03.840 this year and next year, but in the next fifty years. 0:15:04.200 --> 0:15:07.400 And so we need to create the systems and the design, 0:15:07.680 --> 0:15:10.480 the orientation of the building that is going to allow 0:15:10.560 --> 0:15:13.240 that building to be able to be usable and valuable 0:15:13.280 --> 0:15:14.040 into the future. 0:15:14.200 --> 0:15:15.920 I love that this idea, Andy, come on, I got 0:15:15.920 --> 0:15:17.080 me thirty seconds out here. 0:15:17.120 --> 0:15:20.680 You know, climate change is the moral and business imperative 0:15:20.760 --> 0:15:24.120 of our lifetimes. As Diane said, forty percent most people 0:15:24.160 --> 0:15:27.480 think that autobiles are in industry are the largest. It's 0:15:27.560 --> 0:15:30.600 buildings that produce the most amount of CO two. We 0:15:30.640 --> 0:15:33.200 have put in place that by twenty thirty all of 0:15:33.200 --> 0:15:36.360 our buildings will be net zero, and that's really really important. 0:15:36.800 --> 0:15:39.520 That's the focus for us. And I'll give you an 0:15:39.520 --> 0:15:43.360 example of one quick project, San Francisco Airport, the first 0:15:43.640 --> 0:15:47.880 net zero, net zero waste airport in the United States. 0:15:48.440 --> 0:15:49.920 So even publicly, like. 0:15:49.800 --> 0:15:53.440 You were mentioned, Tim, it's coming that municipality is a 0:15:53.520 --> 0:15:54.640 pushing for net zero. 0:15:55.080 --> 0:15:58.000 It's a nice thing to hear, an upbe thing to hear, 0:15:58.040 --> 0:16:00.720 because it does feel like sometimes it's a tough climb, 0:16:00.760 --> 0:16:03.480 especially when it comes to climate change. Andy Cohen, Diane 0:16:03.520 --> 0:16:06.560 Hoskins co CEOs at Gensler their new book, Check it Out. 0:16:06.560 --> 0:16:09.840 Designed for a radically changing world, it'll definitely get you 0:16:09.880 --> 0:16:12.680 thinking when it comes to your neighborhood and just developments 0:16:12.720 --> 0:16:13.200 in general. 0:16:14.080 --> 0:16:17.600 You're listening to the Bloomberg Business Week Podcast. Catch us 0:16:17.640 --> 0:16:20.880 live weekday afternoons from two to five pm Eastern Listen 0:16:20.920 --> 0:16:23.080 on Apple car Play and then brought auto with a 0:16:23.120 --> 0:16:27.320 Bloomberg Business app, or want us live on YouTube. 0:16:27.480 --> 0:16:29.680 We're going to stick gears a little bit talk about 0:16:29.760 --> 0:16:32.160 the real estate market, in particular here in New York. 0:16:32.200 --> 0:16:35.200 The vacancy rate for New York City's most expensive rentals 0:16:35.560 --> 0:16:38.240 plunging to three point four percent last year. Tim that's 0:16:38.280 --> 0:16:39.680 the lowest in almost three decades. 0:16:39.680 --> 0:16:41.320 All right, here's some more numbers for you. So we're 0:16:41.320 --> 0:16:43.560 talking about rental units costing more than twenty four hundred 0:16:43.600 --> 0:16:47.040 dollars a month. Availability fell from about thirteen percent back 0:16:47.080 --> 0:16:49.440 in twenty twenty one. That's according to the latest New 0:16:49.520 --> 0:16:52.320 York City Housing and Vacancy Survey. It reflects caroll a 0:16:52.400 --> 0:16:55.440 broader housing shortage in the Big Apple not seen going 0:16:55.480 --> 0:16:57.080 all the way back to the nineteen sixties. 0:16:57.160 --> 0:16:58.680 Yeah, So let's get to it. Let's get to the 0:16:58.720 --> 0:17:00.640 interview at this hour on the New York City real 0:17:00.720 --> 0:17:03.320 estate market, an important one and a closely watched one 0:17:03.440 --> 0:17:06.840 with us as Lisa Littman, Licensed associate real estate broker 0:17:06.880 --> 0:17:09.359 at Brown Harris Stevens joining us on Zoom in New 0:17:09.440 --> 0:17:11.679 York City. Lisa, good to have you here with Tim 0:17:11.760 --> 0:17:15.600 and me. What are you seeing in terms of availability 0:17:15.920 --> 0:17:19.919 when it comes to the housing supply here in New 0:17:20.000 --> 0:17:22.080 York City? What are you seeing in terms of demand 0:17:22.200 --> 0:17:23.959 for buyers who are looking for properties? 0:17:24.320 --> 0:17:29.320 So we're seeing increased demand since about mid December. I'm 0:17:29.359 --> 0:17:32.159 seeing a lot more people coming back to the market 0:17:32.200 --> 0:17:35.840 to purchase. We definitely had a lull from last spring 0:17:36.160 --> 0:17:37.480 summer through the fall. 0:17:37.560 --> 0:17:39.240 It was quiet, and. 0:17:39.440 --> 0:17:42.960 In the middle of December, sort of out of the blue, 0:17:43.080 --> 0:17:46.960 things started picking up. Hart to know exactly why. Often 0:17:47.080 --> 0:17:50.239 after a period of lull we get busy again for 0:17:50.280 --> 0:17:53.399 obvious reasons. People need to move, people die, they get married, 0:17:54.440 --> 0:17:56.000 they have children, they get divorced. 0:17:56.560 --> 0:17:58.639 So things started picking up in mid December. 0:17:59.720 --> 0:18:03.360 I feel like this January and early February have been 0:18:03.520 --> 0:18:07.960 busier than the average early year. Usually our spring market 0:18:07.960 --> 0:18:10.600 starts more in March April, but it started earlier this year. 0:18:10.760 --> 0:18:14.400 Lisa, how closely is your business tied to the equity 0:18:14.440 --> 0:18:16.840 market and what we see in the bond market when 0:18:16.840 --> 0:18:19.119 it comes to rates in the ten year and mortgage 0:18:19.200 --> 0:18:21.040 rates that is, you know, if we started to see 0:18:21.040 --> 0:18:24.280 markets move higher in November and December, is it fair 0:18:24.320 --> 0:18:26.600 to say that people would come off the sidelines and say, Okay, 0:18:26.600 --> 0:18:28.960 wait a second, I feel wealthier now, I'm ready to 0:18:28.960 --> 0:18:31.200 make a big purchase. And at the same time, I'm 0:18:31.200 --> 0:18:33.960 also seeing mortgage rates come down slightly from what we 0:18:34.000 --> 0:18:35.399 saw over the past few months. 0:18:35.560 --> 0:18:40.399 Absolutely, my market is definitely tied to those factors. Having 0:18:40.440 --> 0:18:42.680 said that, we have a lot of wealthy cash buyers 0:18:42.720 --> 0:18:45.640 in New York, which has continued to fuel our market. 0:18:45.880 --> 0:18:47.480 And the buyers. 0:18:47.080 --> 0:18:50.760 That purchased in the fall were buy a large cash 0:18:50.800 --> 0:18:53.159 buyers at every price point, from one million all the 0:18:53.200 --> 0:18:58.159 way up to one hundred million, and even the uptake 0:18:58.240 --> 0:19:00.760 that started in mid December, that's continuing now. 0:19:00.880 --> 0:19:01.880 We still have a. 0:19:01.840 --> 0:19:04.520 Lot of cash buyers, although I'm starting to see people 0:19:04.880 --> 0:19:07.679 who will finance creeping back into the market. 0:19:07.880 --> 0:19:09.919 Yeah, that's interesting, I guess, you know, when we hear 0:19:09.960 --> 0:19:13.119 something like this, I'm always curious Lisa in terms of perspective, So, 0:19:13.280 --> 0:19:15.800 like what you're seeing today in terms of the real 0:19:15.920 --> 0:19:19.000 estate cycle, how it compares to probably a lot of 0:19:19.000 --> 0:19:19.879 cycles you've seen. 0:19:20.080 --> 0:19:20.440 Is it a. 0:19:20.359 --> 0:19:23.159 Typical one, you know, in terms of the amount of 0:19:23.160 --> 0:19:26.159 people buying by cash? Is it makes sense maybe the 0:19:26.160 --> 0:19:28.760 amount of people you're seeing, you know, starting to maybe 0:19:28.800 --> 0:19:31.840 tap into some loans. I mean, give us some perspective 0:19:31.880 --> 0:19:34.119 because you you've been in the industry for a while, 0:19:34.200 --> 0:19:35.159 so you've seen a lot. 0:19:35.520 --> 0:19:38.480 Yes, Yes, I've been in the industry for twenty five years, 0:19:38.640 --> 0:19:41.439 and I work through nine to eleven and post nine 0:19:41.480 --> 0:19:45.320 to eleven and the financial crisis, and then obviously you know, 0:19:45.400 --> 0:19:52.080 the latest big depression recession. The difference now is that 0:19:52.119 --> 0:19:53.960 there is a lot there are a lot more cash 0:19:53.960 --> 0:19:56.879 buyers than I've seen in the past. And you know, 0:19:56.960 --> 0:19:59.400 since I've started doing this, interest rates have come up 0:19:59.440 --> 0:20:02.639 and gone down. But this most recent rise in interest 0:20:02.720 --> 0:20:07.920 rate was the largest percent to drop rise, and that 0:20:08.000 --> 0:20:11.200 really pulled a lot of people back, freaked a lot 0:20:11.200 --> 0:20:13.280 of people out. I've been doing this long enough to 0:20:13.320 --> 0:20:16.560 know that even now the interest rates aren't really historically 0:20:16.600 --> 0:20:18.480 that high, but in. 0:20:18.440 --> 0:20:21.320 Relation to what they had been, it preached people out. 0:20:21.600 --> 0:20:24.040 But what we learned about the real estate market now 0:20:24.240 --> 0:20:26.320 is that there is so much wealth in New York 0:20:26.560 --> 0:20:29.679 that has been created in the last few years with 0:20:29.800 --> 0:20:32.280 the stock market, that there's a. 0:20:32.200 --> 0:20:34.160 Lot of cash buyer. There's a lot of cash out there, 0:20:34.160 --> 0:20:36.120 and there are a lot of cash buyers now. 0:20:36.200 --> 0:20:39.520 The important thing about cash buyers is they don't overpay. 0:20:39.880 --> 0:20:43.400 They expect to get a good deal because they're paying cash. 0:20:43.720 --> 0:20:45.840