Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelley. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, al Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. New York City Mayor Bill
Speaker 1: de Blasio talking about a recent uptick of virus cases
Speaker 1: in some neighborhoods around New York and so certainly there
Speaker 1: are some increased concerns about the virus once again here
Speaker 1: in the city. Meanwhile, J and J has begun dosing
Speaker 1: as maybe sixty volunteers in a study of its vaccine.
Speaker 1: That's a big deal. Goldman Sachs So and HSBC. Meantime,
Speaker 1: they're among the company's pausing plans to return workers to
Speaker 1: the office in London, and so there is a lot
Speaker 1: going on. Back with us is Dr Joey and Roberts.
Speaker 1: She's Chief value Officer provid in St. Joseph's Health, one
Speaker 1: of the largest health care systems in the US. We've
Speaker 1: talked with them before. Remember, Washington really was at the
Speaker 1: center of the virus in the US from day one.
Speaker 1: Dr Roberts joining us on the phone from Everett, Washington. Um.
Speaker 1: Dr Roberts, so nice to have you here with Jason
Speaker 1: and myself. How are you. I'm well, how are you all?
Speaker 1: And what on the East Coast? We're doing okay? Just
Speaker 1: watching those numbers. Very worried. I think I think it's
Speaker 1: fair to say we're worried. Dr Roberts, and I wonder
Speaker 1: how worried you are and how worried we should be. Well,
Speaker 1: I think we don't want to, you know, we don't
Speaker 1: want to overworry, but we all want to be judicious
Speaker 1: in how we approach the coming season. Well, so how
Speaker 1: should we approach the coming season? Uh? Well, you know,
Speaker 1: I heard you say there's a lot going on, and
Speaker 1: there is a lot going on, but in many ways,
Speaker 1: a lot of it is a lot of noise. I think, Uh,
Speaker 1: we have to look at the coming season like we've
Speaker 1: been looking at the last six months. It is all
Speaker 1: going to get back to those basic things that I've
Speaker 1: talked about before. Whether we're talking about the COVID itself,
Speaker 1: which is starting to come up again we're seeing more
Speaker 1: cases again, or whether we're even talking about flu, which
Speaker 1: is going to be on the horizon here in another
Speaker 1: month or two. And so what do we know at
Speaker 1: this point? Dr Roberts and I sort of alluded to
Speaker 1: this when we were talking about it a little earlier
Speaker 1: in the show. What do we know now that will
Speaker 1: help us effectively contain outbreaks that we know we're going
Speaker 1: to come? Right? We know there's no vaccine, there's no
Speaker 1: cure for this, and so I think it's impossible the
Speaker 1: things like this is just gonna go away. So we're
Speaker 1: gonna see some outbreaks. What do we know about the
Speaker 1: most effective ways to deal with it? Is it just
Speaker 1: the simple things that we know? Or how should we
Speaker 1: be thinking about it? So? Um, sure, Jason, So I
Speaker 1: think there's what do we know is in two ways?
Speaker 1: One is what do we know and what can we
Speaker 1: do as individuals? The other is what do we know
Speaker 1: and what can we do as communities. And I'll talk
Speaker 1: about the communities first because I think you mentioned New York.
Speaker 1: I think New York has done a great job. Many
Speaker 1: of the states that were hit so badly earlier this year,
Speaker 1: around New York, everyone is doing much much better with testing,
Speaker 1: and with that testing capability that you all have out there,
Speaker 1: what we're seeing is we're able to identify little hotspots
Speaker 1: of disease. So rather than New York or Boston or
Speaker 1: a large city being really blindsided with COVID, when we
Speaker 1: test a lot, we can see neighborhoods or even parts
Speaker 1: of neighborhoods with COVID breaking out, and then we can
Speaker 1: come in and really put in our efforts around masking
Speaker 1: and distancing to keep that under keep that COVID infection
Speaker 1: from spreading further. I mean it's as important, yeah, but
Speaker 1: I mean it's as simple as this, right. I mean,
Speaker 1: Jason and I joke about it a lot, like wear
Speaker 1: a mask, because if you go to the CDC website,
Speaker 1: it's like wear a mask, you know, even the head right.
Speaker 1: The director of the CDC said that's almost more potent
Speaker 1: right now, certainly, or could be as as much as
Speaker 1: a as a vaccine would be. So when we see
Speaker 1: these bursts in whether it's New York City or other
Speaker 1: places of the country or over in the UK, is
Speaker 1: it just simply because people are not wearing masks and
Speaker 1: they're not social distancing. Is it just as simple as that,
Speaker 1: or is it because as the world gets colder, or
Speaker 1: is there something environmental that we're just gonna unfortunately have
Speaker 1: to live with the second wave of this. No, it
Speaker 1: is as simple as that. But we also are going
Speaker 1: to have to live with a second wave of it, because, um,
Speaker 1: we can keep this under control. I think Dr Redfield
Speaker 1: said it well last week to Congress. While we all
Speaker 1: wait for vaccines that we hope we're going to be effective,
Speaker 1: the most effective thing we have right now is a mask. Yeah,
Speaker 1: so go ahead, no, no, no no, please finish. Yeah. So
Speaker 1: most effective thing is a mask. The second most effective
Speaker 1: thing is just reducing the number of people that you
Speaker 1: interact with and keeping distance from them. It is that simple.
Speaker 1: Talk to us about the flu, the common the more
Speaker 1: seasonal flu, and how that plays in here. Well, it
Speaker 1: plays in really well because the same things that we're
Speaker 1: doing around COVID, we will keep flu under wraps if
Speaker 1: we keep those masks on and keep that distancing. And
Speaker 1: then of course with flu, we have vaccine. We know
Speaker 1: the vaccine works, and so getting getting your flu shot
Speaker 1: early is going to be a great idea. You know
Speaker 1: what I want to ask you, Dr Roberts, because I
Speaker 1: actually was at the doctor this morning and wanted to
Speaker 1: get a flu shot, and they're like, really sorry, but
Speaker 1: the flu shots haven't come in from the West coast
Speaker 1: because of the fires that there have been delays, and
Speaker 1: I just thought, I'm just curious. And then I got
Speaker 1: into a conversation with the doctor who was saying that,
Speaker 1: you know, there are some concerns I think about production
Speaker 1: gearing up for vaccines for the virus, the COVID nineteen virus.
Speaker 1: So I do wonder do we need to be worried?
Speaker 1: Will there be enough flu vaccines? Will they come in
Speaker 1: time so that we don't have to pile that on
Speaker 1: top of our worries. Um, sure, Carol, I think we
Speaker 1: are in great shape with flu vaccine. I'm a little
Speaker 1: surprised that your doctor didn't have the vaccine. I know
Speaker 1: that it's stocked pretty much across the western and Central
Speaker 1: United States. I had not checked into the Eastern States,
Speaker 1: but UM clinics have been set up pretty much throughout
Speaker 1: the western two thirds of the US UM and I
Speaker 1: think there's not going to be a problem of shortages
Speaker 1: with the flu vaccine on COVID. We are making plans now,
Speaker 1: we are we're starting to make our plans for how
Speaker 1: we're going to vaccinate folks when vaccines becomes available, and
Speaker 1: we are penciling in late November at the time when
Speaker 1: we hope to see the first vaccine, and we think
Speaker 1: that we probably would see adequate supplies about nine months later. Interesting,
Speaker 1: So in the meantime, talk to us about schools, because
Speaker 1: you know, both elementary and secondary high school, but also colleges.
Speaker 1: I mean, this has become one of the critical questions
Speaker 1: and one of the critical I dare say, sort of
Speaker 1: controversies that we're all looking at right now. How do
Speaker 1: you read it, well, Jason, I think the primary and
Speaker 1: secondary schools, I think are one topic and colleges are
Speaker 1: totally separate topic. And I will say I think there's
Speaker 1: no more difficult circumstance to deal with the policymakers than
Speaker 1: primary and secondary schools. How if you bring kids back
Speaker 1: even in places that have low prevalence of disease right now.
Speaker 1: If you bring kids back, it's hard to socially distanced kids,
Speaker 1: especially grade schoolers. How do you keep them from sharing
Speaker 1: their fluids? I mean, gosh, we've all had kids in
Speaker 1: grade school. Yeah. Yeah, And and so I think we
Speaker 1: see a lot of districts trying lots of approaches, maybe
Speaker 1: a hybrid approach in areas where there's very little outbreak
Speaker 1: right now, and then more homes, you know, virtual schooling
Speaker 1: and places with higher outbreaks. Listen. One thing I want
Speaker 1: to bring in our Vince Signarella, who we talked at
Speaker 1: He watches the markets for us. We talked to him
Speaker 1: at the top of our broadcast Dr Roberts, and he
Speaker 1: just sent us a headline from the Washington Post. Study
Speaker 1: shows coronavirus is mutating, potentially evolving, like we don't have
Speaker 1: enough to worry about. What does that mean? We would
Speaker 1: expect that, and we've seen mutations already and a trigge
Speaker 1: in in virology. Mutations are expected, they're common, and generally
Speaker 1: with new viruses, mutations are good news because hands they
Speaker 1: tend to become less virulent. So when we see mutations
Speaker 1: with early with new viruses, they tend to be less
Speaker 1: They create less severe disease than the previews. But do
Speaker 1: we have to keep chasing new vaccines to deal with
Speaker 1: it or now? And just got about thirty seconds here.
Speaker 1: I don't know yet, too early to tell, but those
Speaker 1: vaccine makers are expecting mutations to occur, so you can
Speaker 1: be assured that they are designing for those mutations. All right, Well,
Speaker 1: we always learned so much from you and your team.
Speaker 1: We really appreciate it. Dr Joan Roberts, Chief Value Officer
Speaker 1: of Providence St. Joseph hel joining us from Washington State.
Speaker 1: Of course, that is where we all first heard about
Speaker 1: and encountered this from a domestic perspective. So they Dr
Speaker 1: robertson her team have been watching this so closely and
Speaker 1: have been very kind to share a lot of those
Speaker 1: findings with us, and you know, keeping us honest on
Speaker 1: candidly care what we know what. We don't know what
Speaker 1: the best advice is at any given time. One of
Speaker 1: the things that's clear, we do know the best way
Speaker 1: to at least send this off. Wear a mask, Wear
Speaker 1: a mask, social distancing it works. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio
Speaker 1: this week, especially Equality issue of Bloomberg business Week magazine.
Speaker 1: It's a compliment to today's Bloomberg Equality Summit and the
Speaker 1: cover story about how it's time for a new approach
Speaker 1: to cure inequality because capitalism will, folks, it just isn't
Speaker 1: cutting it. Let's get into this story with Bloomberg News
Speaker 1: Diversity and Sustainability reporter Rebecca Greenfield. She's on the phone
Speaker 1: in Brooklyn. Also with us Bloomberg business Week editor Joel
Speaker 1: Webber on the phone in Massachusetts. Very provocative cover story,
Speaker 1: Are you here, Joel? Yeah? And UM credit to Rebecca,
Speaker 1: who has done a number of stories for us this year,
Speaker 1: and I think this is their second cover UM in
Speaker 1: in this space. And when we started started talking to
Speaker 1: her about how we wanted to approach the quality issue,
Speaker 1: I think she really came at it almost like a
Speaker 1: little bit of a sequel to her last cover story,
Speaker 1: and it was the idea that the last time, it
Speaker 1: was the idea that businesses just have a dearth of
Speaker 1: of of black or minority CEOs, people of color, um
Speaker 1: and with a really really provocative cover that showed just
Speaker 1: how white the fortune is. And this time I think
Speaker 1: she went even a little bit bigger about this and said,
Speaker 1: look like, actually the force of that companies have been
Speaker 1: relying on here is the market. The market is supposed
Speaker 1: to correct things, and it's clue clearly not working. And
Speaker 1: even more provocative, I think, is this idea that within
Speaker 1: HR departments D and I of the Diversity and Initiative
Speaker 1: crew has actually been part of the problem. Almost I
Speaker 1: could pick it up from there. Yeah, thanks so much
Speaker 1: for having me and I yeah definitely also seated as
Speaker 1: a follow up to the last piece. But like Joe said,
Speaker 1: the driving force behind diversity and inclusion initiative to the
Speaker 1: last three decades has been this market driven approach. So
Speaker 1: this idea that you know, discrimination and inequality is bad
Speaker 1: for business. Um, you know, you're you're losing out on
Speaker 1: productive people if you discriminate I guess people just because
Speaker 1: they look like And also there's so much research showing
Speaker 1: that diverse teams are just better and more productive. And
Speaker 1: this has been driving the dconied apartment and you know,
Speaker 1: billions of dollars of industry to get more people who
Speaker 1: are women and minorities into high paying jobs. And in
Speaker 1: the piece, um, I get into how that hasn't worked.
Speaker 1: But also you know how the George Floyd protests this
Speaker 1: summer um have led to a bit of a shift
Speaker 1: in thinking away from this kind of dominant theory. And
Speaker 1: so Becca, what are people actually doing about it? I
Speaker 1: mean part of what you know, I know you and
Speaker 1: your team have described as this is obviously moving from
Speaker 1: the fringes into the mainstream, into the main conversation. That's
Speaker 1: one of the pillars of everything we're doing with the
Speaker 1: Equality Summit. But what sort of actual movement are we
Speaker 1: seeing or is the entire point that we're not actually
Speaker 1: seeing anything. We're so actually are seeing some changes, And
Speaker 1: I think the biggest thing is, you know, this is
Speaker 1: not going to sound like that. It's a mindset shift.
Speaker 1: So before it was kind of like diversity is good,
Speaker 1: and now it's like, Okay, racism is still happening, and
Speaker 1: so we need to do things combat racism. I think
Speaker 1: we can add that to other isms that racisms in
Speaker 1: the focus um for the summer for a good reason.
Speaker 1: So I think that's been a big shift, because you
Speaker 1: do different things once you start thinking about it in
Speaker 1: terms of fixing racism as opposed to promoting diversity. And
Speaker 1: I think The biggest thing that I've noticed that's more
Speaker 1: tangible than in mindset shift is things that look very
Speaker 1: similar to and I would describe as quotas um, which
Speaker 1: is what my first article was about, which I remember
Speaker 1: that that was really great because I really thought about that.
Speaker 1: You know, does this is this what we need to do? Yeah?
Speaker 1: I think companies, although they are reluctant to actually call
Speaker 1: it that because they're very scared of the word for
Speaker 1: various reasons, they are something like, we are going to
Speaker 1: aim to have a certain number or percentage of black
Speaker 1: people or Latin next people in certain high paying, high
Speaker 1: power roles. And that is difference. They had not done
Speaker 1: anything bad aggressive before the Five Lives Matter protests, and
Speaker 1: I think it's things like that that might move the
Speaker 1: needle more or a very least just trying something different
Speaker 1: and then and that's a big shift in the last
Speaker 1: couple of months compared to the last thirty years. Back
Speaker 1: in one of the most provocative things, I'm gonna steal
Speaker 1: your here a little bit um or at least let
Speaker 1: you steal your own thunder, uh is your opening anecdote
Speaker 1: from seventeen um that is about Apple. Can you share
Speaker 1: that one because it's such a provocative way into the story. Yeah.
Speaker 1: So in twenty seventeen, the woman who is hanging up
Speaker 1: Apple's diversity and Incision department, she sing at a conference
Speaker 1: and she said, in her own arks, she said, there
Speaker 1: can be twelve white blue eyes, blonde men in a room,
Speaker 1: and they're going to be diverse, and they're going to
Speaker 1: bring a different life experience and life perspective to the conversation.
Speaker 1: And she apologized for those remarks because you know, people said, uh,
Speaker 1: you know, that's not really diversity. But it was realing
Speaker 1: that that the mission to get more women and minorities
Speaker 1: up and down the Colvor ladder had really become diluted,
Speaker 1: and it really become driven by this idea we just
Speaker 1: made diversity of thought and experiences. And when you think, like, yeah,
Speaker 1: it's true, like a certain of you know, white blonde,
Speaker 1: blue eyed man from me or twenty is going to
Speaker 1: be evernten at white blood blad man from somewhere else,
Speaker 1: But it does not has nothing to do with the
Speaker 1: original mission of getting more women and minorities higher as
Speaker 1: the coorperater. You know. The one thing is, and I
Speaker 1: think about targets, right, I mean, if we want transparency
Speaker 1: like we need to unfortunately, especially early on, look at
Speaker 1: the numbers, find out where we're lacking as companies and
Speaker 1: institutions Rebecca right. And then it is kind of a
Speaker 1: simple fix if you just set some targets to say, Okay,
Speaker 1: we need to consciously think about this and make sure
Speaker 1: we up the numbers. That's how you can kind of
Speaker 1: change this. It feels like in a in a in
Speaker 1: a much faster manner. Yeah, And I think the one
Speaker 1: thing that's missing from that is where are the consequences?
Speaker 1: And I think right now it's self imposed. And I think,
Speaker 1: you know, it's up to journalists and consumerism however, to say, like, okay,
Speaker 1: where are you on this? You know, you made those
Speaker 1: the promise or target you know, in five years and
Speaker 1: you met it um. But I think you know, the
Speaker 1: things that work are you know, chastising people when they
Speaker 1: don't when they don't meet their their quotas. And we've
Speaker 1: seen that before with the California boards law, which has
Speaker 1: also written about before that you know, uh, there's a
Speaker 1: penalty a hundred thousand dollars, which you know is in
Speaker 1: a ton of money for big companies, but there is
Speaker 1: a penalty if you don't have a woman on your board.
Speaker 1: And I think and that really moved companies to move.
Speaker 1: So we'll we'll see as kind of this the public
Speaker 1: reckoning is enough to keep companies on it, but I
Speaker 1: definitely think, yeah, the target is a stub one stub
Speaker 1: to is this pressure right? Right? Well? Uh, we love
Speaker 1: your work and the work that you've been doing, not
Speaker 1: just for Bloomberg Business Week but really running this team
Speaker 1: that is taking this on has been spectacular. So thank you,
Speaker 1: Rebecca Greenfield. Really good to catch up with you. Rebecca Greenfield,
Speaker 1: she oversees all of the managing diversity coverage for Bloomberg.
Speaker 1: She joined us on the phone from New York. Till Webber,
Speaker 1: the editor of the magazine the Special Equality Issue. He
Speaker 1: joined us from Massachusetts. You're listening to Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly on Bloomberg Radio. All right,
Speaker 1: so for Business Week Economics today, let's head down to
Speaker 1: the a t L. Brad Dillman is their chief economists
Speaker 1: for Courtland. He's been looking at the home sales numbers,
Speaker 1: existing home sales numbers, and the broader housing data because housing,
Speaker 1: we know Carol is such an important indicator of where
Speaker 1: we are, where we've been, where we're going. Especially, we
Speaker 1: all want to know where the heck we're going right now.
Speaker 1: So Brad, really nice to catch up with you. What's
Speaker 1: the most important thing we need to know? Actually before
Speaker 1: I ask you that, because you're in the A tail
Speaker 1: in my hometown. Um, how is it down there? What's
Speaker 1: going on? What's going on in Georgia? Right down here?
Speaker 1: You know, we finally got rid of that hot weather.
Speaker 1: You look at our housing market, it's doing okay too.
Speaker 1: I think we've seen some outperformance in multi family, more
Speaker 1: than we had expected given the condition. Kids back in school, Like,
Speaker 1: what's going on around town? Well, our first grader is
Speaker 1: going to be doing homeschooling this year. Um, I think
Speaker 1: it varies city to city. But I don't actually know
Speaker 1: because I only got a first grader and in preschool,
Speaker 1: so I don't focus on the on schooling. I focused
Speaker 1: on housing. We know, we know, we get that, we
Speaker 1: totally get that. But what I guess what we're trying
Speaker 1: to get at is as we talk with with individuals
Speaker 1: around the country, we do like to check in with
Speaker 1: them about how's it going on the virus because We
Speaker 1: had some news today of some you know, clusters in
Speaker 1: New York City where we're starting to see virus cases
Speaker 1: pick up again. So we're just wondering, how's Atlanta doing. Yeah,
Speaker 1: so as far as the virus directly, you know, it's
Speaker 1: Georgia has picked up a little bit, but it isn't
Speaker 1: anything that's truly affecting our day to day. Our office
Speaker 1: here at Courtlands has been opened for several months now,
Speaker 1: and most of our folks choose to come in. We
Speaker 1: do have a math policy, so people abide by that,
Speaker 1: and if you go out, there are people with the restaurants,
Speaker 1: so there's definitely still a social atmosphere going on that
Speaker 1: kind of thing. But you know, our traffic is down
Speaker 1: by a lot, and candidly, that makes it a lot
Speaker 1: more livable. Yeah, oh my god, it's like Los Angeles
Speaker 1: sometimes and it's worse moments down in Atlanta. Well, what's
Speaker 1: interesting is your company is actually a multi family real
Speaker 1: estate company, so you're involved in construction, design, property management,
Speaker 1: you know, all of it. So you do have a
Speaker 1: very strong window or clear window, if you will, into
Speaker 1: what's going on in the housing market. You said traffic
Speaker 1: is down, talk to us at bit about what you're seeing. Well,
Speaker 1: when I meant traffic, I meant traffic as on the road. Okay,
Speaker 1: we're still seeing plenty of interest in the communities itself,
Speaker 1: you are you know, Yeah, multi family occupancies have been
Speaker 1: at roughly a twenty year high prior to COVID. Now
Speaker 1: they have come down a little bit. Atlanta has held up,
Speaker 1: you know, just fine. We haven't had any any notable
Speaker 1: issues here. Our segment is really more and sort of
Speaker 1: a high b low a kind of a framework, and
Speaker 1: that is generally a white collar worker that hasn't been
Speaker 1: affected by the kind of job losses we've seen in
Speaker 1: leisure and hospitality. But if we go back to National,
Speaker 1: you know, you had a very very tight market when
Speaker 1: it comes down to occupancies, they've come down a bit.
Speaker 1: We think they may go down further, but we actually
Speaker 1: think there's the potential they could tighten back up in
Speaker 1: about a year and a year and a half and
Speaker 1: we may see the re emergence some of those costs
Speaker 1: of living pressures that we had that had really dominated
Speaker 1: a lot of social narratives back about a year a
Speaker 1: year and a half ago. Yeah, So what about the
Speaker 1: sort of geographic shifts that we're seeing, especially from sort
Speaker 1: of a white collar perspective, you know, with people saying, well,
Speaker 1: if I don't need to be in a New York
Speaker 1: or San Francisco or Los Angeles, you know, I may
Speaker 1: favor moving to a Nashville and Atlanta and Austin Denver.
Speaker 1: Is that manifesting yet in the data that that you're seeing,
Speaker 1: either within the company's holdings or in the more national
Speaker 1: data that you're saying, Yeah, this has been a trend
Speaker 1: for some time. So I would actually say that migration
Speaker 1: to the sun Belt, which is precisely Courtland strategies to
Speaker 1: be in the Sun Belt, migration really peaked about four
Speaker 1: or five years ago, and it's actually been flowing now.
Speaker 1: It's still underway. It's still very attreative to those jurisdictions
Speaker 1: to be getting net inbound migrants from the Northeast and
Speaker 1: the West coast. It's still really helping to drive rent
Speaker 1: and activity generally. It's not what it was four years ago.
Speaker 1: Now when we look at it in terms of COVID,
Speaker 1: we don't really see a lot of data yet. But
Speaker 1: what we do see is what we can see anecdotally
Speaker 1: and what we capture in our own data. Cortland is
Speaker 1: the largest owner of multifamily apartment homes in both Atlanta
Speaker 1: and in d f W that's Dallas Fort Worth. But
Speaker 1: essentially what we can see there is we can still
Speaker 1: see anecdotal evidence, that's to say, the piece of the
Speaker 1: people who are coming in to tour our units or
Speaker 1: people who tour our units online, where they are and
Speaker 1: where they're coming from. And we're definitely still seeing a
Speaker 1: movement of people out of the Northeast and in particular
Speaker 1: in Phoenix for seeing a lot of folks from California
Speaker 1: is still moving into Arizona and taking a look at
Speaker 1: our communities. So what's what kind of visibility do you
Speaker 1: have and what maybe looks like. Yeah, so we run
Speaker 1: a suite of forecasting models. We forecast about forty five
Speaker 1: i've metropolitan areas the United States, maybe six D submarkets,
Speaker 1: and we forecast effective rent growth and occupant sees and
Speaker 1: supplying demand. And what we're seeing right now is still
Speaker 1: an expectation for a slowdown over the next call at
Speaker 1: six months, we expect annual rent growth to actually be
Speaker 1: negative in its in its upcoming prints and probably trough
Speaker 1: in Q one of next year. And then we expect
Speaker 1: the market to retighten in the second half of a right,
Speaker 1: get to tighten in the first half, second second half. Yeah,
Speaker 1: so a little bit of weakness in the year term
Speaker 1: near term, once you know, the election uncertainty is behind us.
Speaker 1: Once we get a little bit further in what at
Speaker 1: least so far has been a v shape recovery in
Speaker 1: employment markets, we expect that we'll see a retightening and
Speaker 1: multi family and I should say a lot of this
Speaker 1: truly goes back to some of the actions that had
Speaker 1: been taken by policy makers coming out of the Great Recession,
Speaker 1: and that was to stimulate home prices even though housing
Speaker 1: was oversupplied, and even though labor mark gets were in
Speaker 1: a terrible condition. The results of that has been, you know,
Speaker 1: a large difficulty in delivering housing supply in any kind
Speaker 1: of scale over the last ten years, and by our
Speaker 1: estimates and the estimates of others, this is what has
Speaker 1: contributed to a prevailing undersupply of housing in the country,
Speaker 1: not just in terms of listed inventory, but the physical
Speaker 1: product for people to live in. Interesting. All right, Well,
Speaker 1: thanks for the update. We really appreciated. Good luck down
Speaker 1: there in Atlanta. Brad Dillman, Chief economists for Courtland joining
Speaker 1: us on the phone from the A t L. Hopefully
Speaker 1: he can help the Falcons get a win because they
Speaker 1: are really having a tough time. But just saying, our
Speaker 1: buddy Arthur Blank had a very very bad weekend again
Speaker 1: right again, yes, the journal. But you let me drive.
Speaker 1: Oh no, no, no, no, honey, please, I'll do the
Speaker 1: right I want to drive. Just drive, baby, the questions trying.
Speaker 1: This is the Drive to the close. Thanks, We'll drying
Speaker 1: us down on Bluebird Radio. Alright, time for the Drive
Speaker 1: to the clothes. Let's check in with Mark C. Smith.
Speaker 1: He's vice president Wealth Management portfolio manager for UBS Financial Services.
Speaker 1: He joined me. He's joining us on the phone from
Speaker 1: New York City, Mark, how are you? How are things? Well? Yeah,
Speaker 1: we're doing the best we can on the circumstances. Uh.
Speaker 1: You know, most of us are still working from home,
Speaker 1: but we're going to the office from time to time,
Speaker 1: so we're just making the best of it. Yeah. Yeah.
Speaker 1: And so how does that change the way that like
Speaker 1: you deal with clients and sort of talk to them,
Speaker 1: because I'm sure everybody's in similar circumstances, but it's got
Speaker 1: to change the way that your sort of world operates.
Speaker 1: I would imagine, yeah, it's it's it's turned to everybody's
Speaker 1: life upside down. But I think what this is bringing
Speaker 1: to everyone is resiliency and I'm seeing that firsthand every
Speaker 1: single day with my clients. I have clients that owned restaurants.
Speaker 1: They are completely changing their model to ordering online and
Speaker 1: delivery service and that's making up much of their revenue,
Speaker 1: especially the ones that are in New York. But the
Speaker 1: ones that have some clients that have restaurants and airports,
Speaker 1: I mean, they're just they have no way of getting
Speaker 1: out of this um because riderships down on most US carriers,
Speaker 1: So those folks are really struggling. You're seeing though that
Speaker 1: the professional class folks that can work from home with
Speaker 1: a with a with a laptop are saving up an
Speaker 1: extraordinarily amount of extraordinary amount of money and they're able
Speaker 1: to purchase homes in the suburbs. And that's why you're
Speaker 1: seeing UH sales and the suburbs a record highs. And
Speaker 1: you're seeing a flight from you know, major metropolitan you
Speaker 1: know areas because you're you're you're an apartment building. So
Speaker 1: many of my clients are just are are high talent
Speaker 1: and York and going to the Hamptons or Connecticut and
Speaker 1: deep in Jersey where they're getting you know, sometimes doubling
Speaker 1: their living space. We're definitely seeing it. Does it stick, Mark,
Speaker 1: or do you think it's just until we get through this.
Speaker 1: I mean, a house purchase is not something you buy
Speaker 1: and then like change your mind the next week. But
Speaker 1: I get that, But I'm just curious. This is changing
Speaker 1: the paradigm for probably our generation. I think that it's
Speaker 1: going to be very difficult to tell folks to come
Speaker 1: back in when they worked for a full year, possibly
Speaker 1: too from home and productivity didn't go down, it went up.
Speaker 1: So I don't see any employer telling folks who who
Speaker 1: are doing well in this environment that they have to
Speaker 1: go back to the office when a vaccine is distributed
Speaker 1: in the next you know, three or four years, because
Speaker 1: let's be honest, even if it's we we get a
Speaker 1: vaccine next year, you're talking about a two year implementation
Speaker 1: of getting that out to three million plus Americans. So
Speaker 1: you know, that's the reality is that once we figure
Speaker 1: this out and are adapting quickly and they're continuing to
Speaker 1: make money. You're seeing that in some of the SMP
Speaker 1: five hundred stocks. I mean, folks are really killing it
Speaker 1: in this environment. Unfortunately, the rest of the country isn't.
Speaker 1: And if you're working for one of those companies that
Speaker 1: are just doing really well, I don't see them making
Speaker 1: you come back to the office, right And we're going
Speaker 1: to talk to General Mills, the CEO. They reported earnings today,
Speaker 1: you know, and people have been stocking up their pantries
Speaker 1: and so we're gonna get an idea of kind of
Speaker 1: what the outlook is. Um we want to move on
Speaker 1: to the markets. But one more question you talk about,
Speaker 1: you know, nobody really pressuring because productivity is we're doing
Speaker 1: you know, doing well, and a lot of industries and
Speaker 1: companies we're seeing a play out in the market. Having
Speaker 1: said that, there is pressure though within the financial sector,
Speaker 1: it seems like for people to get back to office,
Speaker 1: especially in New York City. Well, I think what the
Speaker 1: financial sectors realizing is that they have the biggest uh
Speaker 1: you know, foothold in lending money out for the purchases
Speaker 1: of commercial property, residential property. They have the biggest amount
Speaker 1: of to lose if things don't get back to someone
Speaker 1: in normality pretty quickly because they're on the look for
Speaker 1: billions of dollars of these buildouts of these major cities.
Speaker 1: So they've got a lead by example because they've got
Speaker 1: the most to lose, in my opinion, and so they've
Speaker 1: they've got to get workers back in it. Got to
Speaker 1: start building some confidence in these major cities. Otherwise people
Speaker 1: are just gonna cut and run and they're gonna be
Speaker 1: loved with the bag. That's my opinion. That's really interesting.
Speaker 1: You sort of have to prove that you're in it
Speaker 1: so that uh so that your clients ultimately will pony up.
Speaker 1: Very interesting. So, Mark, we are talking all the time
Speaker 1: on this show. I think probably around our kitchen tables
Speaker 1: are dining room tables when we're socially distanced with neighbors
Speaker 1: and whatnot. About the election. You know, we're forty one,
Speaker 1: forty two days away at this point. As an investor,
Speaker 1: how should you be thinking about this? This is gonna
Speaker 1: be one of the most consequenceial elections of our generation
Speaker 1: because you'd have you know, two completely different candidates, the
Speaker 1: country split you know, down the middle depending on where
Speaker 1: you live, and that this is going to create a
Speaker 1: tremendous amount of volatility and portfolios for the next forty
Speaker 1: odd days and there's there's a good reason that we
Speaker 1: have you know, sixty million people out of have of
Speaker 1: apply for unemployment over the last twenty six weeks, you know,
Speaker 1: and right now, uh, we're we're kind of ignoring them.
Speaker 1: We're just kind of looking at them five hundreds. And
Speaker 1: so that's going to play out in in this election
Speaker 1: as well as in in a big way. I don't
Speaker 1: think where I think we're underestimating how many people are
Speaker 1: hurting in this country. And then and then you're depending
Speaker 1: on a stimulus plan. Let me tell you something. If
Speaker 1: the Republicans shove a set of a Supreme Court justice
Speaker 1: um and in the next forty days, I don't see
Speaker 1: any reason why the Democrats would go and and help
Speaker 1: them out get the second simulus package. And we need
Speaker 1: a second stimulus package. That's why the markets are reacting
Speaker 1: in the way they are to they were down six hundred.
Speaker 1: It's because we don't see any end insight, no help
Speaker 1: insight from the federal government. Besides what the Fed has
Speaker 1: already done. Rates are basically zero. There's not much more
Speaker 1: they can do. They've got to look the Congress. Congress
Speaker 1: now has a huge issue. They are split out to
Speaker 1: the Supreme Court, and they're not going to work together
Speaker 1: until they figure that out. Therefore, we don't see a
Speaker 1: stimulus package. Probably untie how many Americans can deal with
Speaker 1: that amount of uncertainty. So this election is going to
Speaker 1: be huge in in that um folks are trying to
Speaker 1: figure out how they're going to be able to make
Speaker 1: money with a Democrat or Republican in office, depending on
Speaker 1: who you are. I understand why you would fall on
Speaker 1: either side of the coin. But the problem is is
Speaker 1: that until this is all sorted out, it will not
Speaker 1: be sorted out on November three. That's additional volatility to
Speaker 1: what we have right now. So you know, that's the
Speaker 1: that's the real thing. How much more upside do we
Speaker 1: have in this market to stay in with all this
Speaker 1: uncertainty around us? I feel like the debate needs to
Speaker 1: be is it going to be the distressed investment story
Speaker 1: going into or will it be you know, the recovery cycle? Uh?
Speaker 1: In terms of what what the story and theme will be.
Speaker 1: We can't recover without a vaccine, bottom line, So if
Speaker 1: we don't have a vaccine, we're not recover ring. How
Speaker 1: could we move forward and the economy in the stock
Speaker 1: market it's gonna be very hard to do because it's
Speaker 1: because because if people are gonna come continue to close
Speaker 1: down to schools, their businesses or restaurants opening and closing
Speaker 1: untildars of vaccine, and how do you get back to
Speaker 1: normal if that's happening, right and seeing it already in London,
Speaker 1: and some worries about certain parts of New York City.
Speaker 1: Hey Mark, great to have you here. Look forward to
Speaker 1: having you join us again in the future. Marxi Smith,
Speaker 1: VP of Wealth Management and Portfolio Manager at UBS Financial Services,
Speaker 1: on the phone from New York, coming in hot kind
Speaker 1: of like that. I like it. Thanks so much for
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