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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 Apple 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: Thank you everyone, there's cool press confidence. Thank you for

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Speaker 3: a right.

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Speaker 4: That was a press briefing from one police Applaza in

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Speaker 4: Lower Manhattan. Poice Commissioner Jessica Tish, Chief of Department at

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Speaker 4: Jeffrey Madra, and Chief of Detective Joseph Kenny providing an

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Speaker 4: update regarding the hom side often Manhattan, the United Health executive.

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Speaker 4: Let's get some more reporting on this with Miles Miller.

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Speaker 4: He's managing editor for Bloomberg News. Miles, anything in that

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Speaker 4: press conference strike you as of note here still obviously

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Speaker 4: very very early in the investigation.

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Speaker 5: Yeah, you know, this is a really interesting investigation. They

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Speaker 5: have a suspect who is able to flee on a

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Speaker 5: city bike after shooting an executive in Midtown Manhattan in

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Speaker 5: full view of plenty of people. Midtown Manhattan, of course,

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Speaker 5: flooded with people around the time this happened, just before

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Speaker 5: seven o'clock in the morning. It's very striking that Brian Thompson,

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Speaker 5: a CEO of a company that is currently trading at

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Speaker 5: about six hundred and thirteen dollars a share, with no

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Speaker 5: executive protection, walking from his hotel into investor with no

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Speaker 5: executive protection, and he's able to be shot by a

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Speaker 5: person who was able to flee into New York City

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Speaker 5: traffic at the height of rush hour.

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Speaker 6: So, Miles, you have extensive work having worked with the

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Speaker 6: NYPD when you worked in local news, you also led

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Speaker 6: communications strategy.

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Speaker 7: For the FDN.

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Speaker 6: Y tell me about the process inside the NYPD when

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Speaker 6: something like this happens.

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Speaker 5: Yeah, So the first thing that the nypds did was

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Speaker 5: search Arcis cameras, so that is the NYPD's network of

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Speaker 5: cameras throughout Manhattan, and from those cameras they were able

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Speaker 5: to pull that photo of the suspects standing in a

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Speaker 5: shooter stamps and aiming at the executive at Brian Thompson.

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Speaker 4: So that's the first step.

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Speaker 5: The second step is going to be working with those

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Speaker 5: partners like City Bike to figure out where we wound

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Speaker 5: up going number one, number two, to figure out where

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Speaker 5: that suspect is, and then also trying to trace every step.

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Speaker 5: They put all of these videos that they take the

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Speaker 5: suspect from the moment it happened to him getting a

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Speaker 5: Central Park. They put it together on an app called Patentizer,

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Speaker 5: and they're able to figure out just exactly where that

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Speaker 5: person wound up and how to continue doing the investigation.

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Speaker 5: So the investigation will focus on where he is. And

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Speaker 5: then also they're doing that search worn in Brian Thompson's

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Speaker 5: hotel room. They'll try to figure out if there was

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Speaker 5: anything there that can lead them to what may have

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Speaker 5: happened here.

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Speaker 4: All right, Myles, thank you so much for that. We

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Speaker 4: appreciate your reporting. Miles Miller, Managing editor, Bloomberg News in

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Speaker 4: this unfolding story, extraordinary fluid, very early stages. But we

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Speaker 4: did get some comments from leadership of the NYPD that

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Speaker 4: again they are working all angles as you can imagine, right.

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Speaker 6: And United Health Group obviously has many different subsidiaries, and

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Speaker 6: Brian Thompson is the CEO of one of them, so

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Speaker 6: he was the CEO of United Health.

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Speaker 7: They also have financial services.

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Speaker 6: They have a Medicare division, community division, and employer division,

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Speaker 6: so he headed one of those divisions for the overall

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Speaker 6: United Health Group and Bloomberg News will be keeping you

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Speaker 6: updated on any headlines as they cross. And we heard

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Speaker 6: also that the tree lighting ceremony today, the whole event

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Speaker 6: starts at seven pm, and that will go on as

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Speaker 6: expected with a much heavier police presence as well as

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Speaker 6: ununiformed detectives.

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Speaker 2: Yeah.

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Speaker 4: I mean, I think one thing New York has shown

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Speaker 4: over and over again is the resilience of the city

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Speaker 4: and its people. And we move on, you know, as

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Speaker 4: most folks tried to do as well.

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

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Speaker 2: week days at ten am Eastern on applecar Play and

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Speaker 2: Just say Alexa Play Bloomberg.

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Speaker 4: Eleven thirty, Let's check in with Steve Miller, who he's

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Speaker 4: the chair of the ISM Services PMI, Steve, thanks so

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Speaker 4: much for joining us here. I'm looking at the ISM

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Speaker 4: Services Index came in at fifty two point one. The

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Speaker 4: consensus was fifty five point seven.

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Speaker 8: Here.

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Speaker 4: What are we seeing on the services side of the

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Speaker 4: US economy here?

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Speaker 3: Now, I think this month's number is a solid number.

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Speaker 9: It's on trend. If you look past the last two months.

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Speaker 9: I had a couple of interviews that I was in

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Speaker 9: over the last two months. I mentioned just as likely

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Speaker 9: those blips in new orders and business activity as well

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Speaker 9: as supplier deliveries could have been the result of the

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Speaker 9: port strike, people getting ready risk management around port strike

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Speaker 9: and hurricanes, and those seem to be off trend. This

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Speaker 9: one seems to be right on trend and continues to

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Speaker 9: reinforce slow to moderate growth in the services sector.

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Speaker 7: So the market is taking a little bit of different view.

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Speaker 6: If I just look at the front end of the

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Speaker 6: yield curve, you're seeing a bin to the BUN market

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Speaker 6: yields a little lower, the dollar is dropping, and the

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Speaker 6: S and P.

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Speaker 7: Is off its highs.

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Speaker 6: And I say that because it seems like the market

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Speaker 6: is taking it as more weakness. Is that how you're

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Speaker 6: describing it, like continued weaker services grinding.

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Speaker 7: Lower or some sort of like, yeah, it's fine.

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Speaker 3: I think for the next six months. To me, it

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Speaker 3: looks fine.

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Speaker 9: It's a trend of about fifty two percent, which is

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Speaker 9: which is a solid number, although lower than it's been.

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Speaker 3: In previous years.

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Speaker 9: I think more of the concern is when you look

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Speaker 9: at the summertime, which in non COVID years has been

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Speaker 9: anywhere from half a percentage point up to six percentage

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Speaker 9: points down from where it is in the September to

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Speaker 9: November timeframe.

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Speaker 3: So I think in the near term it looks solid.

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Speaker 9: I'd be you know, there there's so many variables out

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Speaker 9: there on tariffs and interest rate changes and that type

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Speaker 9: of thing, fedrarate changes. I think, you know, I think

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Speaker 9: the summertime is more of the question mark.

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Speaker 4: All right, Steve, thank you so much with that. Steve Miller,

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Speaker 4: he's the chairman of IM. That's the Institute for Supply

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Speaker 4: and Management on Zoom from Aledo, Texas. How about that.

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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: Outo 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 4: Salesforce dot com big tech company reporting big earnings last night,

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Speaker 4: stock up nine and a half percent at a hitting

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Speaker 4: an all time high market cap just below three hundred

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Speaker 4: and fifty billion dollars. One of the real winners here

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Speaker 4: stocks up thirty eight percent year today. Let's break down

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Speaker 4: some of those numbers on rog Rana joins us the

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Speaker 4: freshly shaved on a rock rana, Thank goodness, shave that

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Speaker 4: thing off. Technolog Jannel's Bloomberg intelligence from.

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Speaker 7: The technial them, I don't recoonize them.

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Speaker 4: He looks like a professional now makes some years younger

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Speaker 4: from that tech hub of Chicago, Illinois. Ana Rod talk

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Speaker 4: to us about Salesforce dot com. They seem to really

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Speaker 4: put up some good numbers. What is this street like

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Speaker 4: about it?

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Speaker 8: I think when you really peel the numbers on sales

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Speaker 8: and backlog, they were pretty much in line. But I

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Speaker 8: think what is really happening and something that we highlighted

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Speaker 8: during a preview w some notes that we wrote earlier

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Speaker 8: in October, they released a new product, Collegent Force, which

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Speaker 8: is truly their AI product. Now that's not going to

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Speaker 8: drive revenue over the next twelve months, but it really

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Speaker 8: changes the shape of the company and with the direction

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Speaker 8: it's going in, and I think that's what investors are

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Speaker 8: buying in right now, along with their steady margin expansion.

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Speaker 8: Margins were so good yesterday. That has been a big

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Speaker 8: story for them as well. So I think on all

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Speaker 8: fronts they're doing well and as I said, the sales

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Speaker 8: growth is not going to show up near time, near term,

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Speaker 8: but I think they have a clear strategy how they're

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Speaker 8: going to play this game.

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Speaker 6: So to this point, if Salesforce are doing this well

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Speaker 6: without agent Force materially contributing to its bottom line, like

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Speaker 6: I mean, what kind of upside do we really have

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Speaker 6: and when do they read sort of full tilt on that.

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Speaker 8: Yeah, I think I would agree with you on that

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Speaker 8: because you know, people are buying into that without seeing

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Speaker 8: the results.

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Speaker 4: And I think this is.

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Speaker 8: Truly what we have seen a lot in the software

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Speaker 8: space is people really figured out which are the companies

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Speaker 8: that will benefit in the long run, and a lot

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Speaker 8: of that, you could say, value realization happens sooner, you know,

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Speaker 8: when the revenue realization is so perhaps down the road

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Speaker 8: there will be a time when the software space may

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Speaker 8: not see evaluation uptake, but the sales growth will go up.

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Speaker 8: But you know, one of the things you have to

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Speaker 8: think about it when former Salesforce point of view, they

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Speaker 8: have two really critical products. One is sales automation for

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Speaker 8: salespeople and the other is customer service products for customer

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Speaker 8: service people and in enterprises AI and is the biggest

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Speaker 8: beneficiary to those customer service people chat pots AI agents.

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Speaker 8: We recently did a conference and when we ask the

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Speaker 8: question as to how many people use chat pots, it's

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Speaker 8: still less than twenty percent at this point. So that

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Speaker 8: is the direction where the world is going in terms

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Speaker 8: of working with retailers, working with you know, airlines, and

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Speaker 8: these guys are right in the middle of it.

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Speaker 4: All right, So what is what's getting the market all excited?

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Speaker 3: Here?

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Speaker 4: This this this AI product? What is their AI product

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Speaker 4: and what is it supposed to do? Because I actually

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Speaker 4: moderated a panel with the Salesforce executive and I forgot

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Speaker 4: everything he told me, So think about it.

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Speaker 8: I actually have a very interesting demonstration if you go

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Speaker 8: to YouTube and look at their Dreamforce and demo, it

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Speaker 8: was actually pretty interesting because they did Sacks Fifth Avenue.

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Speaker 8: So think about it this way, Paul, you you buy.

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Speaker 8: You know, the presenter bought a jacket from saxs Fifth Avenue,

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Speaker 8: didn't like the size or something, just went to the

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Speaker 8: chatpot and say can you find me a different size?

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Speaker 8: And can you the chatbot basically took care of everything,

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Speaker 8: basically knew what size this person was, was able to

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Speaker 8: return the jacket, you know, send another one to this

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Speaker 8: person's address, or that matter, if it wasn't available, you

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Speaker 8: could go to the store and pick it up without

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Speaker 8: the intervention of a human. That level of sophistication coming

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Speaker 8: into a chat pot so quick in the game, I

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Speaker 8: think it's really what people are getting excited about and put.

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Speaker 6: Some numbers on that, like how much is that going

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Speaker 6: to do for them in terms of revenue? And how

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Speaker 6: much do they charge for like that chatbot? So say

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Speaker 6: like that chatbot works for me for two minutes, what's

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Speaker 6: the translation of money?

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Speaker 8: So the pricing starts at two dollars per conversation. Now

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Speaker 8: the question is what does that mean. So when you

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Speaker 8: look at you know, a person calling AD and D

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Speaker 8: or Hoverizon, that call could cost as much as ten

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Speaker 8: to fifteen dollars. If it's a quasi mix of an

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Speaker 8: automated chat pot and a customer service person, you know,

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Speaker 8: that call could be seven dollars eight dollars per conversation.

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Speaker 8: Salesforce pricing at two dollars or so, so it will

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Speaker 8: force companies to pix their customer service because think about it,

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Speaker 8: if you're an insurance company, if you are a phone company,

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Speaker 8: that's really a very large portion of your cost. Amazon's

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Speaker 8: already doing so much of that in the chat pot.

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Speaker 8: If you are used to returning things on Amazon through

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Speaker 8: their chat pot, it's actually pretty impressive right now. But

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Speaker 8: it is still rule based, which is, if it can

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Speaker 8: only do so much based on the data that's available,

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Speaker 8: it doesn't take you to the next level. And this

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Speaker 8: is what Salesforce is saying is the direction of that

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Speaker 8: is that the agent or the chat pot is able

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Speaker 8: to execute a transaction for you without getting a human

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Speaker 8: involved in it, which is refund the money for you

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Speaker 8: return your things, give you an alternative of whatever you

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Speaker 8: were doing before without any person getting in, and that

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Speaker 8: really saves costs.

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Speaker 4: All right, So this company's got like thirty nine to

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Speaker 4: forty percent EBITDA margin. Pretty much all of that goes

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Speaker 4: down to the free cash flow line. What do they

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Speaker 4: do with their cash right now?

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Speaker 8: They're buying back years. I'm sorry, Paul, but that's exactly

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Speaker 8: what most software companies do when they have it.

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Speaker 2: Now.

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Speaker 8: Think about it this way. Just one and a half

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Speaker 8: two years ago, this was almost ten percentage points lower

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Speaker 8: because they were spending even more on sales and marketing.

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Speaker 8: The big story for Salesforce in the last one and

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Speaker 8: a half years has been a real improvement in margins

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Speaker 8: and as of today, compared to let's say March of

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Speaker 8: twenty twenty three, it's up ten percentage points. That's big

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Speaker 8: if you look at from any you know, financial metric.

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Speaker 6: All right, An, I really appreciate it, really good stuff.

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Speaker 6: I'm if you give me a chatbot that can actually

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Speaker 6: do something that when I call City Bank doesn't take

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Speaker 6: me an hour.

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Speaker 7: I'm gay. I'm down for that.

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Speaker 6: All right, enter a ground on Bloomberg Intelligence Technology and

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Speaker 6: I was joining us.

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Speaker 7: It has not worked for me yet. It hasn't worked

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Speaker 7: for me.

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Speaker 4: Call for customer service. It freaks me out when I

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Speaker 4: don't get a live.

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Speaker 7: Yeah, and I keep saying my name and they're like,

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Speaker 7: I don't understand you. Please talk to a real good boy.

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Speaker 3: That's unders. Yeah.

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

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

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Speaker 2: Royd Auto with the Bloomberg Business App. You can also

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Speaker 2: listen live on Amazon Alexa from our flagship New York station,

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

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Speaker 4: We love talking about commercial real estate all around this country.

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Speaker 4: Because it's such a dynamic business and it's undergone a

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Speaker 4: tremendous amount of change, particularly resulting from the pandemic, as

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Speaker 4: this industry tries to continue its recovery and reinvention. And

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Speaker 4: we love talking to some good, smart people about that.

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Speaker 4: We got that today. Liz Hart, she's at over at Newmark.

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Speaker 4: She's the president of Leasing for North America, and that's

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Speaker 4: US and Canada. Abigail Deulttle Joints is too. She's our

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Speaker 4: market correspondent in our Bloomberg and Directive broker studio. So Liz,

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Speaker 4: let's step back and as we think about the last

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Speaker 4: few year has been very difficult for certain parts of

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Speaker 4: commercial real estate, not all, but certainly like office for example.

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Speaker 4: I knows you as an industry always looking forward. What's

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Speaker 4: the view forward for commercial real estate.

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Speaker 1: In this country? We really see twenty four five is

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Speaker 1: the year the real estate gets redefined. We're five years

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Speaker 1: post of the pandemic. We're putting that all behind us.

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Speaker 4: Now.

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Speaker 1: People have experimented with different ways to view commercial real

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Speaker 1: estate and now it's really about setting the value and

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Speaker 1: creating the value going forward.

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Speaker 7: So across key.

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Speaker 1: Urban markets, particularly in New York and San Francisco. We're

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Speaker 1: seeing demand that we haven't seen in five years, which

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Speaker 1: is a really good thing to see because that demand

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Speaker 1: will start to create future value in those assets.

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Speaker 7: What kind of demand? What are you hearing in terms

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Speaker 7: of demand?

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Speaker 1: I think the most active segments of the market are

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Speaker 1: still financial services across the country. Also, technology has a

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Speaker 1: very strong and growing portion of demand, so we're seeing

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Speaker 1: both of that.

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Speaker 10: So relative to Newmark, let's back up for a moment,

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Speaker 10: publicly traded company, one of the top real estate advisory

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Speaker 10: firms in the country. Lots of different businesses. What's the

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Speaker 10: main business and in terms of this thesis about twenty

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Speaker 10: twenty five being the reset, what are the data points

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Speaker 10: that you're seeing.

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Speaker 1: Well, we've certainly created a purposeful kit of different parts

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Speaker 1: that will come together to drive our business forward. So

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Speaker 1: we're number one in capital markets across the country. As

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Speaker 1: you're looking at what's going to happen in the debt

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Speaker 1: markets and what's happening with the debt that will be

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Speaker 1: maturing in the next year, there will be an onslaught

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Speaker 1: of capital markets activity that will happen across the country

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Speaker 1: and that will really.

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Speaker 7: Reset the value.

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Speaker 1: And that mixed with tenant demand is what's going to

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Speaker 1: drive the business forward. So we think the services business

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Speaker 1: is going to have really spectacular years in twenty five

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Speaker 1: and twenty six.

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Speaker 10: So in terms of being the top capital markets, that

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Speaker 10: means you're actually doing these financings because we keep hearing

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Speaker 10: and talking about this let's call it one trillion to

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Speaker 10: one point five trillion dollar wall of maturity is coming,

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Speaker 10: but there's been some extent and pretend.

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Speaker 7: So you'll be very much involved in that activity.

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Speaker 1: Yes, we have an incredibly active debt market team right

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Speaker 1: now and they've traded a billion dollars just in REZI

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Speaker 1: to or C the office to RESI conversions alone in

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Speaker 1: the last couple of months. So we're seeing that turn on.

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Speaker 1: So we're last year it was a lot of hey,

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Speaker 1: what are we going to do next? It's starting to

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Speaker 1: hit trades and then actually move forward, and we think

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Speaker 1: that's really optimistic for.

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Speaker 7: The year ahead.

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Speaker 4: Where the part within commercial real estate, where's the growth,

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Speaker 4: where's the opportunity? Because I still feel like in office

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Speaker 4: we I'm not sure maybe we're starting to form a bottom,

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Speaker 4: but we haven't seen a ton of activity, but I

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Speaker 4: know there are other parts that are working.

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Speaker 1: Yeah, I mean, I think the opportunity is trophy has

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Speaker 1: been talked about a lot, so we know there's opportunity

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Speaker 1: in trophy. But right below that, there's a category that's

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Speaker 1: being repositioned right now towards having more amenities and being

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Speaker 1: better space. That definitely is a segment of the market

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Speaker 1: that we think there's a lot of opportunity, particularly in

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Speaker 1: places like Seattle, San Francisco, Boston where you do see

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Speaker 1: the demand picking up at such a large level. So

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Speaker 1: that would be one category. We also see a lot

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Speaker 1: of opportunity in office to RESI conversion that can happen.

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Speaker 1: We're tracking probably about two percent of the market could

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Speaker 1: be converted, and two percent sounds like a lot. And

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Speaker 1: I'm a leasing broker, so you're probably wondering, why is

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Speaker 1: the leasing broker advocating for an office to RESI conversion.

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Speaker 1: But when you have twenty percent of availability across the

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Speaker 1: entire market, there's still a lot of space that companies

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Speaker 1: can transact on from an office perspective. But we have,

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Speaker 1: you know, four to seven million homes that are missing

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Speaker 1: in America, and so if we can take that real

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Speaker 1: estate and reposition it, I think that's really an exciting

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Speaker 1: part of what we'd see in twenty five, but it's

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Speaker 1: unlikely to happen without the assistance of tax abatements, government

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Speaker 1: interference and really pushing this forward, like we're going to

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Speaker 1: have to do this together.

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Speaker 6: Well, I was going to say, I've heard that the

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Speaker 6: convergence there isn't as easy as it may sound. That

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Speaker 6: it's a lot more complicated, particularly like windows and like

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Speaker 6: central air and like moving walls and stuff.

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Speaker 1: It's physically very complicated, which is why you don't see

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Speaker 1: it happening on even a larger part. But what's interesting

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Speaker 1: is we started tinkering this more and more post pandemic,

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Speaker 1: and there's some very notable projects that will set the

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Speaker 1: blueprint going forward that are delivering this year, including twenty

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Speaker 1: five water in New York City. So we really see

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Speaker 1: this as being something that will pick up.

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Speaker 10: As our markets correspondent. Also with this real estate beat,

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Speaker 10: I of course took a look at Newmark Stark because

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Speaker 10: we don't talk to a lot of real estate folks

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Speaker 10: who are around publicly trading companies, or at least that's

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Speaker 10: not something that I've been in my coverage so much

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Speaker 10: so far over the last year year and a half.

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Speaker 7: But it's really interesting.

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Speaker 10: So you went public in twenty seven and then up

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Speaker 10: and then down, and then up and then down about

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Speaker 10: sixty five percent on the real estate downturn, but then

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Speaker 10: up almost two hundred percent off of that bottom into today,

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Speaker 10: still a little bit below your record high, but it

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Speaker 10: tells me that some of those smart investors out there

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Speaker 10: are seeing something similar to what you're talking about in

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Speaker 10: twenty twenty five being redefined. You have a sense for

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Speaker 10: why people are gobbling up your stock like this.

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Speaker 1: Yeah, I mean, I think that there's certainly a sentiment

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Speaker 1: in the market that the markets are improving. But also

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Speaker 1: Newmark has a very big strategy focused on top talent,

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Speaker 1: and that's something that's very differentiated from a lot of

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Speaker 1: our peers. So with AI and all the changes that

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Speaker 1: are happening, we're still doubling down and investing in the

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Speaker 1: downturn and top talent, and I think that's incredibly important

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Speaker 1: as we recover, because fundamentally, those people are the ones

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Speaker 1: that are making the decisions about how to reprice and

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Speaker 1: how to think about what the value creation is going forward.

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Speaker 1: We really know how to create alpha for our clients,

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Speaker 1: and I think that's what we're seeing people be attracted

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Speaker 1: to in our stock.

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Speaker 4: Say I'm out in Middle America, I'm a developer. I

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Speaker 4: want to put up a multifamily. Whatever is my bank

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Speaker 4: and lend me the money. Where am I going to

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Speaker 4: get the capital for that?

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Speaker 1: These days? It depends on the situation. So it's obviously

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Speaker 1: very unique on every single asset. But we are seeing

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Speaker 1: debt and equity enter the market again because now that

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Speaker 1: we have enough data points to know where the market is,

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Speaker 1: people know how to price things right. I think the

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Speaker 1: uncertainty of yesterday is now behind us and it's really

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Speaker 1: about moving forward. That doesn't mean every project will pencil.

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Speaker 1: It doesn't mean that every project will be at the

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Speaker 1: same value that it was before. It just means there's

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Speaker 1: an opportunity to move forward and create the next chapter.

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Speaker 7: Where are the problem points still?

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Speaker 1: I mean the debt that's maturing is still the problem point,

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Speaker 1: because that's when the value is changing. And so there's

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Speaker 1: this really interesting mix. And I can give a specific,

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Speaker 1: you know, example from a building actually in San Francisco

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Speaker 1: where the debt was just too high, that it was

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Speaker 1: too high for anyone to do a transaction, but there

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Speaker 1: there was a willing tenant willing to take one hundred

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Speaker 1: thousand square feet in a building that they loved, right,

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Speaker 1: everything else worth, but the capital structure below just didn't

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Speaker 1: support it. I think, you know, there's a little bit

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Speaker 1: of a standoff, and you can see that standoff being

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Speaker 1: something that was really present in twenty three and twenty

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Speaker 1: four because there's no way to move forward. But now

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Speaker 1: I think people have realized, like, we are where we are,

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Speaker 1: so we've got to move and I think we'll start

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Speaker 1: seeing some of those become more liquid in the market

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Speaker 1: and people just realizing, like, yesterday's value is gone, and

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Speaker 1: I've got to move forward because I'm not able to

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Speaker 1: meet the demand in the market today.

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Speaker 7: So with that standoff, like we use that example, who caved,

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Speaker 7: was that was the situation.

443
00:20:22,760 --> 00:20:25,359
Speaker 1: Actually, interestingly enough, neither caved and the tenant went somewhere

444
00:20:25,400 --> 00:20:27,600
Speaker 1: else and created the value for someone else, right, And

445
00:20:27,640 --> 00:20:29,800
Speaker 1: then I guess that's there's this saying and commercial real

446
00:20:29,880 --> 00:20:32,520
Speaker 1: estate that the best amenity is a well capitalized landlord,

447
00:20:32,760 --> 00:20:34,399
Speaker 1: and you know that's probably going to continue to be

448
00:20:34,440 --> 00:20:36,240
Speaker 1: true in twenty five, twenty six and for the next

449
00:20:36,280 --> 00:20:39,280
Speaker 1: several years as this readjustment happens. But the fact that

450
00:20:39,320 --> 00:20:40,800
Speaker 1: the demand is in the market does mean there's a

451
00:20:40,800 --> 00:20:41,560
Speaker 1: lot of opportunity.

452
00:20:41,760 --> 00:20:45,679
Speaker 4: Are we seeing equity people come in and say, at

453
00:20:45,760 --> 00:20:47,920
Speaker 4: this value, I'm ready to put in equity into this

454
00:20:48,040 --> 00:20:52,040
Speaker 4: building and lender, you're just going to have to work

455
00:20:52,080 --> 00:20:54,359
Speaker 4: something out, and the lenders are willing to work something

456
00:20:54,440 --> 00:20:57,280
Speaker 4: out certainly. I mean, because the lender at the end

457
00:20:57,280 --> 00:20:58,840
Speaker 4: of the day will have to take a haircut the

458
00:20:59,119 --> 00:21:02,160
Speaker 4: original equity. We're going to get a take take acrecut.

459
00:21:02,440 --> 00:21:04,639
Speaker 4: But if fresh equity is ready to come in, because

460
00:21:04,680 --> 00:21:07,400
Speaker 4: I would guess there's a lot of smart money out

461
00:21:07,440 --> 00:21:10,200
Speaker 4: there that says, boy, fifty percent marked down, I'm in.

462
00:21:10,520 --> 00:21:12,080
Speaker 1: There's a lot of smart money out there, and a

463
00:21:12,119 --> 00:21:14,000
Speaker 1: lot of it is coming in places like San Francisco'd

464
00:21:14,000 --> 00:21:16,040
Speaker 1: be a great example of that right where you can

465
00:21:16,119 --> 00:21:18,320
Speaker 1: trade down and get something that will go for the

466
00:21:18,359 --> 00:21:19,639
Speaker 1: next generation to create value.

467
00:21:19,960 --> 00:21:23,400
Speaker 10: So this is certainly a news heavy cycle and year

468
00:21:23,640 --> 00:21:27,040
Speaker 10: President elect Trump going to be taking office in January.

469
00:21:27,160 --> 00:21:29,760
Speaker 10: What's the effect I've been dying to know what's the effect.

470
00:21:29,520 --> 00:21:31,080
Speaker 7: Going to be on real estate?

471
00:21:32,000 --> 00:21:34,639
Speaker 10: You know, if rates go higher but less regulation, what

472
00:21:34,840 --> 00:21:35,960
Speaker 10: is the buzz out there?

473
00:21:36,040 --> 00:21:38,200
Speaker 1: Yeah, I think commercial real estate largely sees. You know,

474
00:21:38,280 --> 00:21:40,520
Speaker 1: Trump is being pro growth, as many people do, and

475
00:21:40,600 --> 00:21:43,320
Speaker 1: so that's a positive for our industry. But I think

476
00:21:43,440 --> 00:21:46,720
Speaker 1: for commercial real estate, what also matters, in addition to

477
00:21:46,800 --> 00:21:49,160
Speaker 1: the national election is what's happening at the local level.

478
00:21:49,240 --> 00:21:52,399
Speaker 1: So seeing half of the urban mayors switch in the

479
00:21:52,480 --> 00:21:55,399
Speaker 1: last election cycle, seeing people like Daniel Lorie who are

480
00:21:55,440 --> 00:21:59,800
Speaker 1: pro business, pro safety, pro transportation coming into office, that's

481
00:22:00,000 --> 00:22:01,520
Speaker 1: really what starts to turn our cities on.

482
00:22:01,960 --> 00:22:04,280
Speaker 10: You know. Regulation wise, there are some that said that

483
00:22:04,400 --> 00:22:07,879
Speaker 10: in this election year that the regulation on regional banks

484
00:22:08,119 --> 00:22:11,359
Speaker 10: was relatively laxed because of the presidential cycle, but that

485
00:22:11,440 --> 00:22:13,000
Speaker 10: it could come on. Do you see any problems with

486
00:22:13,080 --> 00:22:15,840
Speaker 10: the regional banks in the coming year, any kind of

487
00:22:16,080 --> 00:22:18,920
Speaker 10: a crisis of sorts similar to the Silicon Valley situation

488
00:22:19,480 --> 00:22:19,880
Speaker 10: last year.

489
00:22:20,400 --> 00:22:22,760
Speaker 1: I think that the large crisis point is behind us,

490
00:22:22,800 --> 00:22:25,240
Speaker 1: because now people are willing to realize that the values

491
00:22:25,280 --> 00:22:28,119
Speaker 1: have changed and that we're moving forward. But certainly there

492
00:22:28,160 --> 00:22:29,960
Speaker 1: could be some bumpiness in the next twenty four months.

493
00:22:30,320 --> 00:22:32,640
Speaker 4: You just moved to New York City. I did from

494
00:22:32,720 --> 00:22:35,359
Speaker 4: San Francisco. I did give us the expert view and

495
00:22:35,920 --> 00:22:39,919
Speaker 4: just San Francisco, I mean, where are we has bottom.

496
00:22:40,040 --> 00:22:42,480
Speaker 4: Is it coming back? What's driving it, what's good, what's bad?

497
00:22:42,760 --> 00:22:44,720
Speaker 1: I would say never bet again San Francisco. It's a

498
00:22:44,840 --> 00:22:47,160
Speaker 1: very resilient economy. It has been since the gold Rush.

499
00:22:47,200 --> 00:22:49,800
Speaker 1: As you know, it is coming back. I think if

500
00:22:49,840 --> 00:22:52,119
Speaker 1: you look at Market Street. Market Street's the big thoroughfare

501
00:22:52,240 --> 00:22:55,280
Speaker 1: in San Francisco. Two years ago, everyone said Market Street's dead,

502
00:22:55,320 --> 00:22:57,680
Speaker 1: it's never coming back, you know, write it off. Well,

503
00:22:57,760 --> 00:23:00,720
Speaker 1: what's happened in the last twelve months, and the city

504
00:23:00,760 --> 00:23:02,560
Speaker 1: anchored it because they're coming back to the office five

505
00:23:02,640 --> 00:23:05,200
Speaker 1: days a week. At the midpoint, Notion, which is a

506
00:23:05,240 --> 00:23:07,440
Speaker 1: growing AI company, you just took a very large lease

507
00:23:07,480 --> 00:23:10,639
Speaker 1: from Brookfield, resetting that building to have increasing value. And

508
00:23:10,760 --> 00:23:13,080
Speaker 1: on the other end, you have groups like BXP who

509
00:23:13,160 --> 00:23:15,000
Speaker 1: are doing amazing work with the City of San Francisco

510
00:23:15,080 --> 00:23:17,800
Speaker 1: to redo the plaza and make sure that it's safe

511
00:23:17,920 --> 00:23:19,640
Speaker 1: for people who are coming and going from the downtown

512
00:23:19,720 --> 00:23:21,920
Speaker 1: core right next to that rich transit of the Ferry

513
00:23:21,960 --> 00:23:24,840
Speaker 1: building coming and going. So you see these signs across.

514
00:23:25,040 --> 00:23:27,600
Speaker 1: It's just a fill in from there, and the streetscape

515
00:23:27,640 --> 00:23:30,359
Speaker 1: still feels incredibly vibrant in San Francisco. So the other

516
00:23:30,400 --> 00:23:32,359
Speaker 1: thing I really like right now is Daniel Lourie is

517
00:23:32,760 --> 00:23:36,080
Speaker 1: calling leaders to participate in government, including people like Sam

518
00:23:36,119 --> 00:23:38,800
Speaker 1: Maltman who are on his transition team. But he's also

519
00:23:39,280 --> 00:23:42,119
Speaker 1: bringing back other businesses into San Francisco, making sure it's

520
00:23:42,160 --> 00:23:45,359
Speaker 1: not just too reliant on the tech economy, but finance, legal,

521
00:23:45,760 --> 00:23:47,920
Speaker 1: other sectors coming in and being vibrant in that city.

522
00:23:48,119 --> 00:23:50,800
Speaker 10: So, speaking of San Francisco, Amy Price, president of Vigo,

523
00:23:50,960 --> 00:23:53,080
Speaker 10: joined us maybe about two months ago or so, and

524
00:23:53,200 --> 00:23:56,520
Speaker 10: she's one of the well known voices people in the

525
00:23:56,640 --> 00:23:59,840
Speaker 10: commercial real estate space, and she said that she believes this.

526
00:24:00,080 --> 00:24:01,920
Speaker 7: Fourth quarter is the bottom.

527
00:24:02,000 --> 00:24:04,840
Speaker 10: She called it definitively from her view in about fifteen

528
00:24:04,880 --> 00:24:05,399
Speaker 10: seconds or so.

529
00:24:05,480 --> 00:24:08,200
Speaker 7: Do you agree, Yes, I agree completely, She's right there.

530
00:24:08,280 --> 00:24:12,760
Speaker 6: You go appreciate that, all right, both, thank you very much,

531
00:24:12,800 --> 00:24:16,320
Speaker 6: really appreciate that. Liz Hart Newmark, President of North America, Lisa,

532
00:24:16,359 --> 00:24:18,320
Speaker 6: we very much appreciate it. Definitely come back, Thanks so much.

533
00:24:18,359 --> 00:24:21,359
Speaker 6: Abigail Doolittle joining us from Bloomberg.

534
00:24:21,840 --> 00:24:26,359
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535
00:24:26,560 --> 00:24:29,440
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536
00:24:29,560 --> 00:24:32,960
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537
00:24:33,280 --> 00:24:36,640
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538
00:24:36,800 --> 00:24:39,760
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539
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