WEBVTT - UnitedHealth Executive Fatally Shot 0:00:02.440 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.280 --> 0:00:12.120 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:12.200 --> 0:00:15.280 weekdays at ten am Eastern on Apple Card playing Android 0:00:15.320 --> 0:00:18.360 Auto with the Bloomberg Business app. Listen on demand wherever 0:00:18.480 --> 0:00:21.640 you get your podcasts, or watch us live on YouTube. 0:00:23.079 --> 0:00:25.360 Thank you everyone, there's cool press confidence. Thank you for 0:00:25.640 --> 0:00:25.880 a right. 0:00:25.920 --> 0:00:29.040 That was a press briefing from one police Applaza in 0:00:29.280 --> 0:00:33.280 Lower Manhattan. Poice Commissioner Jessica Tish, Chief of Department at 0:00:33.360 --> 0:00:36.080 Jeffrey Madra, and Chief of Detective Joseph Kenny providing an 0:00:36.120 --> 0:00:40.920 update regarding the hom side often Manhattan, the United Health executive. 0:00:41.040 --> 0:00:43.160 Let's get some more reporting on this with Miles Miller. 0:00:43.159 --> 0:00:46.600 He's managing editor for Bloomberg News. Miles, anything in that 0:00:46.640 --> 0:00:50.479 press conference strike you as of note here still obviously 0:00:50.640 --> 0:00:52.120 very very early in the investigation. 0:00:53.200 --> 0:00:56.720 Yeah, you know, this is a really interesting investigation. They 0:00:56.800 --> 0:00:59.120 have a suspect who is able to flee on a 0:00:59.160 --> 0:01:04.840 city bike after shooting an executive in Midtown Manhattan in 0:01:05.120 --> 0:01:07.720 full view of plenty of people. Midtown Manhattan, of course, 0:01:07.840 --> 0:01:11.600 flooded with people around the time this happened, just before 0:01:11.720 --> 0:01:15.280 seven o'clock in the morning. It's very striking that Brian Thompson, 0:01:15.480 --> 0:01:19.160 a CEO of a company that is currently trading at 0:01:19.240 --> 0:01:23.520 about six hundred and thirteen dollars a share, with no 0:01:23.840 --> 0:01:28.440 executive protection, walking from his hotel into investor with no 0:01:28.520 --> 0:01:31.400 executive protection, and he's able to be shot by a 0:01:31.480 --> 0:01:35.200 person who was able to flee into New York City 0:01:35.280 --> 0:01:36.680 traffic at the height of rush hour. 0:01:37.160 --> 0:01:41.160 So, Miles, you have extensive work having worked with the 0:01:41.280 --> 0:01:44.000 NYPD when you worked in local news, you also led 0:01:44.040 --> 0:01:45.520 communications strategy. 0:01:45.120 --> 0:01:45.760 For the FDN. 0:01:45.959 --> 0:01:51.360 Y tell me about the process inside the NYPD when 0:01:51.480 --> 0:01:53.000 something like this happens. 0:01:54.840 --> 0:01:58.080 Yeah, So the first thing that the nypds did was 0:01:58.160 --> 0:02:01.080 search Arcis cameras, so that is the NYPD's network of 0:02:01.120 --> 0:02:04.160 cameras throughout Manhattan, and from those cameras they were able 0:02:04.240 --> 0:02:08.000 to pull that photo of the suspects standing in a 0:02:08.040 --> 0:02:12.840 shooter stamps and aiming at the executive at Brian Thompson. 0:02:13.280 --> 0:02:14.079 So that's the first step. 0:02:14.160 --> 0:02:16.079 The second step is going to be working with those 0:02:16.120 --> 0:02:20.520 partners like City Bike to figure out where we wound 0:02:20.639 --> 0:02:23.320 up going number one, number two, to figure out where 0:02:23.360 --> 0:02:28.160 that suspect is, and then also trying to trace every step. 0:02:28.280 --> 0:02:32.639 They put all of these videos that they take the 0:02:32.680 --> 0:02:35.400 suspect from the moment it happened to him getting a 0:02:35.480 --> 0:02:38.079 Central Park. They put it together on an app called Patentizer, 0:02:38.560 --> 0:02:40.560 and they're able to figure out just exactly where that 0:02:40.639 --> 0:02:43.560 person wound up and how to continue doing the investigation. 0:02:43.680 --> 0:02:46.120 So the investigation will focus on where he is. And 0:02:46.200 --> 0:02:49.560 then also they're doing that search worn in Brian Thompson's 0:02:49.639 --> 0:02:52.200 hotel room. They'll try to figure out if there was 0:02:52.520 --> 0:02:54.679 anything there that can lead them to what may have 0:02:54.760 --> 0:02:55.200 happened here. 0:02:55.520 --> 0:02:57.280 All right, Myles, thank you so much for that. We 0:02:57.360 --> 0:03:01.200 appreciate your reporting. Miles Miller, Managing editor, Bloomberg News in 0:03:01.240 --> 0:03:06.000 this unfolding story, extraordinary fluid, very early stages. But we 0:03:06.080 --> 0:03:09.480 did get some comments from leadership of the NYPD that 0:03:10.040 --> 0:03:12.840 again they are working all angles as you can imagine, right. 0:03:12.919 --> 0:03:15.880 And United Health Group obviously has many different subsidiaries, and 0:03:15.919 --> 0:03:18.280 Brian Thompson is the CEO of one of them, so 0:03:18.400 --> 0:03:20.480 he was the CEO of United Health. 0:03:20.560 --> 0:03:22.079 They also have financial services. 0:03:22.120 --> 0:03:25.560 They have a Medicare division, community division, and employer division, 0:03:25.639 --> 0:03:28.680 so he headed one of those divisions for the overall 0:03:28.880 --> 0:03:31.720 United Health Group and Bloomberg News will be keeping you 0:03:31.840 --> 0:03:34.320 updated on any headlines as they cross. And we heard 0:03:34.360 --> 0:03:36.720 also that the tree lighting ceremony today, the whole event 0:03:36.760 --> 0:03:39.000 starts at seven pm, and that will go on as 0:03:39.040 --> 0:03:41.640 expected with a much heavier police presence as well as 0:03:42.680 --> 0:03:44.800 ununiformed detectives. 0:03:44.880 --> 0:03:45.040 Yeah. 0:03:45.040 --> 0:03:46.440 I mean, I think one thing New York has shown 0:03:46.520 --> 0:03:48.640 over and over again is the resilience of the city 0:03:48.680 --> 0:03:52.080 and its people. And we move on, you know, as 0:03:52.600 --> 0:03:54.280 most folks tried to do as well. 0:03:55.960 --> 0:03:59.800 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:00.000 --> 0:04:02.840 week days at ten am Eastern on applecar Play and 0:04:03.000 --> 0:04:05.880 Android Auto with a Bloomberg business ad. You can also 0:04:06.000 --> 0:04:09.440 listen live on Amazon Alexa from our flagship New York station, 0:04:09.840 --> 0:04:11.840 Just say Alexa Play Bloomberg. 0:04:11.880 --> 0:04:15.880 Eleven thirty, Let's check in with Steve Miller, who he's 0:04:15.920 --> 0:04:21.000 the chair of the ISM Services PMI, Steve, thanks so 0:04:21.080 --> 0:04:22.680 much for joining us here. I'm looking at the ISM 0:04:22.800 --> 0:04:25.760 Services Index came in at fifty two point one. The 0:04:25.880 --> 0:04:27.640 consensus was fifty five point seven. 0:04:27.640 --> 0:04:27.760 Here. 0:04:27.839 --> 0:04:29.360 What are we seeing on the services side of the 0:04:29.440 --> 0:04:30.200 US economy here? 0:04:31.520 --> 0:04:34.480 Now, I think this month's number is a solid number. 0:04:34.560 --> 0:04:37.919 It's on trend. If you look past the last two months. 0:04:38.440 --> 0:04:40.000 I had a couple of interviews that I was in 0:04:40.360 --> 0:04:43.200 over the last two months. I mentioned just as likely 0:04:43.800 --> 0:04:47.640 those blips in new orders and business activity as well 0:04:47.680 --> 0:04:50.960 as supplier deliveries could have been the result of the 0:04:51.080 --> 0:04:54.599 port strike, people getting ready risk management around port strike 0:04:54.680 --> 0:04:58.400 and hurricanes, and those seem to be off trend. This 0:04:58.520 --> 0:05:01.120 one seems to be right on trend and continues to 0:05:01.200 --> 0:05:04.640 reinforce slow to moderate growth in the services sector. 0:05:04.960 --> 0:05:07.599 So the market is taking a little bit of different view. 0:05:07.760 --> 0:05:08.960 If I just look at the front end of the 0:05:09.040 --> 0:05:11.200 yield curve, you're seeing a bin to the BUN market 0:05:11.279 --> 0:05:14.040 yields a little lower, the dollar is dropping, and the 0:05:14.160 --> 0:05:14.440 S and P. 0:05:14.680 --> 0:05:15.479 Is off its highs. 0:05:15.480 --> 0:05:17.279 And I say that because it seems like the market 0:05:17.360 --> 0:05:22.320 is taking it as more weakness. Is that how you're 0:05:22.360 --> 0:05:25.960 describing it, like continued weaker services grinding. 0:05:25.760 --> 0:05:27.760 Lower or some sort of like, yeah, it's fine. 0:05:29.160 --> 0:05:31.600 I think for the next six months. To me, it 0:05:31.720 --> 0:05:32.279 looks fine. 0:05:32.400 --> 0:05:36.280 It's a trend of about fifty two percent, which is 0:05:36.560 --> 0:05:39.520 which is a solid number, although lower than it's been. 0:05:39.400 --> 0:05:40.919 In previous years. 0:05:41.200 --> 0:05:42.800 I think more of the concern is when you look 0:05:42.839 --> 0:05:46.479 at the summertime, which in non COVID years has been 0:05:46.520 --> 0:05:49.960 anywhere from half a percentage point up to six percentage 0:05:50.000 --> 0:05:53.280 points down from where it is in the September to 0:05:53.360 --> 0:05:54.320 November timeframe. 0:05:54.800 --> 0:05:57.800 So I think in the near term it looks solid. 0:05:58.720 --> 0:06:01.320 I'd be you know, there there's so many variables out 0:06:01.360 --> 0:06:04.520 there on tariffs and interest rate changes and that type 0:06:04.520 --> 0:06:08.520 of thing, fedrarate changes. I think, you know, I think 0:06:08.680 --> 0:06:10.440 the summertime is more of the question mark. 0:06:10.800 --> 0:06:13.320 All right, Steve, thank you so much with that. Steve Miller, 0:06:13.360 --> 0:06:17.119 he's the chairman of IM. That's the Institute for Supply 0:06:17.200 --> 0:06:20.320 and Management on Zoom from Aledo, Texas. How about that. 0:06:21.839 --> 0:06:25.680 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:25.800 --> 0:06:28.920 weekdays at ten am Eastern on Affo card playing Android 0:06:28.920 --> 0:06:31.960 Outo with the Bloomberg Business app. Listen on demand wherever 0:06:32.080 --> 0:06:35.240 you get your podcasts, or watch us live on YouTube. 0:06:36.839 --> 0:06:41.120 Salesforce dot com big tech company reporting big earnings last night, 0:06:41.560 --> 0:06:43.760 stock up nine and a half percent at a hitting 0:06:43.800 --> 0:06:48.039 an all time high market cap just below three hundred 0:06:48.040 --> 0:06:50.360 and fifty billion dollars. One of the real winners here 0:06:50.440 --> 0:06:52.720 stocks up thirty eight percent year today. Let's break down 0:06:53.040 --> 0:06:55.240 some of those numbers on rog Rana joins us the 0:06:55.360 --> 0:06:58.600 freshly shaved on a rock rana, Thank goodness, shave that 0:06:58.720 --> 0:07:02.200 thing off. Technolog Jannel's Bloomberg intelligence from. 0:07:02.080 --> 0:07:04.159 The technial them, I don't recoonize them. 0:07:04.160 --> 0:07:06.880 He looks like a professional now makes some years younger 0:07:07.040 --> 0:07:10.880 from that tech hub of Chicago, Illinois. Ana Rod talk 0:07:10.880 --> 0:07:13.040 to us about Salesforce dot com. They seem to really 0:07:13.120 --> 0:07:14.960 put up some good numbers. What is this street like 0:07:15.000 --> 0:07:15.280 about it? 0:07:16.400 --> 0:07:18.760 I think when you really peel the numbers on sales 0:07:18.840 --> 0:07:21.440 and backlog, they were pretty much in line. But I 0:07:21.560 --> 0:07:24.200 think what is really happening and something that we highlighted 0:07:24.840 --> 0:07:27.800 during a preview w some notes that we wrote earlier 0:07:28.400 --> 0:07:31.560 in October, they released a new product, Collegent Force, which 0:07:31.640 --> 0:07:34.520 is truly their AI product. Now that's not going to 0:07:34.600 --> 0:07:37.120 drive revenue over the next twelve months, but it really 0:07:37.240 --> 0:07:39.760 changes the shape of the company and with the direction 0:07:39.880 --> 0:07:42.280 it's going in, and I think that's what investors are 0:07:42.280 --> 0:07:45.680 buying in right now, along with their steady margin expansion. 0:07:45.800 --> 0:07:48.520 Margins were so good yesterday. That has been a big 0:07:48.640 --> 0:07:51.080 story for them as well. So I think on all 0:07:51.240 --> 0:07:54.480 fronts they're doing well and as I said, the sales 0:07:54.520 --> 0:07:57.080 growth is not going to show up near time, near term, 0:07:57.400 --> 0:07:59.200 but I think they have a clear strategy how they're 0:07:59.200 --> 0:07:59.920 going to play this game. 0:08:00.600 --> 0:08:03.200 So to this point, if Salesforce are doing this well 0:08:03.320 --> 0:08:06.800 without agent Force materially contributing to its bottom line, like 0:08:07.400 --> 0:08:10.040 I mean, what kind of upside do we really have 0:08:10.240 --> 0:08:12.360 and when do they read sort of full tilt on that. 0:08:13.360 --> 0:08:14.920 Yeah, I think I would agree with you on that 0:08:15.080 --> 0:08:17.600 because you know, people are buying into that without seeing 0:08:17.640 --> 0:08:18.120 the results. 0:08:18.160 --> 0:08:18.920 And I think this is. 0:08:20.440 --> 0:08:22.600 Truly what we have seen a lot in the software 0:08:22.640 --> 0:08:25.880 space is people really figured out which are the companies 0:08:26.240 --> 0:08:28.600 that will benefit in the long run, and a lot 0:08:28.680 --> 0:08:32.280 of that, you could say, value realization happens sooner, you know, 0:08:32.360 --> 0:08:35.280 when the revenue realization is so perhaps down the road 0:08:35.280 --> 0:08:37.719 there will be a time when the software space may 0:08:37.800 --> 0:08:40.840 not see evaluation uptake, but the sales growth will go up. 0:08:41.120 --> 0:08:42.400 But you know, one of the things you have to 0:08:42.440 --> 0:08:45.200 think about it when former Salesforce point of view, they 0:08:45.200 --> 0:08:48.199 have two really critical products. One is sales automation for 0:08:48.280 --> 0:08:52.040 salespeople and the other is customer service products for customer 0:08:52.080 --> 0:08:56.960 service people and in enterprises AI and is the biggest 0:08:57.280 --> 0:09:01.560 beneficiary to those customer service people chat pots AI agents. 0:09:01.960 --> 0:09:06.199 We recently did a conference and when we ask the 0:09:06.320 --> 0:09:09.319 question as to how many people use chat pots, it's 0:09:09.400 --> 0:09:12.240 still less than twenty percent at this point. So that 0:09:12.480 --> 0:09:14.960 is the direction where the world is going in terms 0:09:15.000 --> 0:09:18.880 of working with retailers, working with you know, airlines, and 0:09:19.000 --> 0:09:20.640 these guys are right in the middle of it. 0:09:20.840 --> 0:09:23.800 All right, So what is what's getting the market all excited? 0:09:23.840 --> 0:09:23.960 Here? 0:09:24.040 --> 0:09:27.439 This this this AI product? What is their AI product 0:09:27.480 --> 0:09:29.720 and what is it supposed to do? Because I actually 0:09:29.840 --> 0:09:33.040 moderated a panel with the Salesforce executive and I forgot 0:09:33.080 --> 0:09:36.000 everything he told me, So think about it. 0:09:36.240 --> 0:09:38.959 I actually have a very interesting demonstration if you go 0:09:39.040 --> 0:09:41.319 to YouTube and look at their Dreamforce and demo, it 0:09:41.440 --> 0:09:44.439 was actually pretty interesting because they did Sacks Fifth Avenue. 0:09:44.679 --> 0:09:46.880 So think about it this way, Paul, you you buy. 0:09:47.040 --> 0:09:50.840 You know, the presenter bought a jacket from saxs Fifth Avenue, 0:09:51.000 --> 0:09:54.199 didn't like the size or something, just went to the 0:09:54.280 --> 0:09:57.240 chatpot and say can you find me a different size? 0:09:57.280 --> 0:09:59.959 And can you the chatbot basically took care of everything, 0:10:00.160 --> 0:10:03.959 basically knew what size this person was, was able to 0:10:04.120 --> 0:10:07.439 return the jacket, you know, send another one to this 0:10:07.559 --> 0:10:11.160 person's address, or that matter, if it wasn't available, you 0:10:11.200 --> 0:10:13.240 could go to the store and pick it up without 0:10:13.280 --> 0:10:16.920 the intervention of a human. That level of sophistication coming 0:10:16.960 --> 0:10:19.559 into a chat pot so quick in the game, I 0:10:19.640 --> 0:10:24.000 think it's really what people are getting excited about and put. 0:10:23.880 --> 0:10:25.840 Some numbers on that, like how much is that going 0:10:25.920 --> 0:10:28.840 to do for them in terms of revenue? And how 0:10:28.920 --> 0:10:31.280 much do they charge for like that chatbot? So say 0:10:31.320 --> 0:10:34.320 like that chatbot works for me for two minutes, what's 0:10:34.360 --> 0:10:35.360 the translation of money? 0:10:36.240 --> 0:10:39.960 So the pricing starts at two dollars per conversation. Now 0:10:40.000 --> 0:10:42.360 the question is what does that mean. So when you 0:10:42.640 --> 0:10:45.760 look at you know, a person calling AD and D 0:10:46.000 --> 0:10:49.000 or Hoverizon, that call could cost as much as ten 0:10:49.000 --> 0:10:51.960 to fifteen dollars. If it's a quasi mix of an 0:10:51.960 --> 0:10:56.040 automated chat pot and a customer service person, you know, 0:10:56.160 --> 0:10:58.880 that call could be seven dollars eight dollars per conversation. 0:10:59.440 --> 0:11:02.920 Salesforce pricing at two dollars or so, so it will 0:11:03.080 --> 0:11:06.880 force companies to pix their customer service because think about it, 0:11:07.120 --> 0:11:09.760 if you're an insurance company, if you are a phone company, 0:11:10.040 --> 0:11:13.319 that's really a very large portion of your cost. Amazon's 0:11:13.320 --> 0:11:15.199 already doing so much of that in the chat pot. 0:11:15.240 --> 0:11:18.480 If you are used to returning things on Amazon through 0:11:18.520 --> 0:11:21.319 their chat pot, it's actually pretty impressive right now. But 0:11:21.480 --> 0:11:24.120 it is still rule based, which is, if it can 0:11:24.160 --> 0:11:26.760 only do so much based on the data that's available, 0:11:27.080 --> 0:11:29.079 it doesn't take you to the next level. And this 0:11:29.280 --> 0:11:32.280 is what Salesforce is saying is the direction of that 0:11:32.600 --> 0:11:35.320 is that the agent or the chat pot is able 0:11:35.360 --> 0:11:39.360 to execute a transaction for you without getting a human 0:11:39.400 --> 0:11:41.719 involved in it, which is refund the money for you 0:11:41.960 --> 0:11:46.520 return your things, give you an alternative of whatever you 0:11:46.600 --> 0:11:49.719 were doing before without any person getting in, and that 0:11:49.880 --> 0:11:50.800 really saves costs. 0:11:51.320 --> 0:11:53.160 All right, So this company's got like thirty nine to 0:11:53.160 --> 0:11:55.560 forty percent EBITDA margin. Pretty much all of that goes 0:11:55.559 --> 0:11:57.880 down to the free cash flow line. What do they 0:11:57.920 --> 0:12:00.280 do with their cash right now? 0:12:00.280 --> 0:12:03.240 They're buying back years. I'm sorry, Paul, but that's exactly 0:12:03.360 --> 0:12:05.640 what most software companies do when they have it. 0:12:05.880 --> 0:12:06.000 Now. 0:12:06.160 --> 0:12:08.520 Think about it this way. Just one and a half 0:12:08.520 --> 0:12:11.560 two years ago, this was almost ten percentage points lower 0:12:11.840 --> 0:12:14.160 because they were spending even more on sales and marketing. 0:12:14.640 --> 0:12:16.959 The big story for Salesforce in the last one and 0:12:17.000 --> 0:12:19.920 a half years has been a real improvement in margins 0:12:20.200 --> 0:12:23.160 and as of today, compared to let's say March of 0:12:23.520 --> 0:12:26.720 twenty twenty three, it's up ten percentage points. That's big 0:12:27.040 --> 0:12:29.520 if you look at from any you know, financial metric. 0:12:30.640 --> 0:12:33.439 All right, An, I really appreciate it, really good stuff. 0:12:34.000 --> 0:12:36.120 I'm if you give me a chatbot that can actually 0:12:36.200 --> 0:12:39.040 do something that when I call City Bank doesn't take 0:12:39.080 --> 0:12:39.439 me an hour. 0:12:39.720 --> 0:12:40.800 I'm gay. I'm down for that. 0:12:41.440 --> 0:12:43.760 All right, enter a ground on Bloomberg Intelligence Technology and 0:12:43.800 --> 0:12:44.400 I was joining us. 0:12:44.520 --> 0:12:46.439 It has not worked for me yet. It hasn't worked 0:12:46.480 --> 0:12:46.640 for me. 0:12:46.880 --> 0:12:49.400 Call for customer service. It freaks me out when I 0:12:49.440 --> 0:12:50.240 don't get a live. 0:12:50.400 --> 0:12:52.559 Yeah, and I keep saying my name and they're like, 0:12:52.720 --> 0:12:55.360 I don't understand you. Please talk to a real good boy. 0:12:55.559 --> 0:12:56.719 That's unders. Yeah. 0:12:58.240 --> 0:13:01.800 You're listening to the Bloomberg and Intelligence Podcast. Catch us 0:13:01.880 --> 0:13:05.120 live weekdays at ten am Eastern on applecar Play and 0:13:05.520 --> 0:13:08.160 Royd Auto with the Bloomberg Business App. You can also 0:13:08.240 --> 0:13:11.720 listen live on Amazon Alexa from our flagship New York station, 0:13:12.120 --> 0:13:14.880 Just Say Alexa, playing Bloomberg eleven thirty. 0:13:16.600 --> 0:13:19.960 We love talking about commercial real estate all around this country. 0:13:19.960 --> 0:13:22.199 Because it's such a dynamic business and it's undergone a 0:13:22.360 --> 0:13:26.080 tremendous amount of change, particularly resulting from the pandemic, as 0:13:26.160 --> 0:13:29.839 this industry tries to continue its recovery and reinvention. And 0:13:29.960 --> 0:13:32.040 we love talking to some good, smart people about that. 0:13:32.120 --> 0:13:35.200 We got that today. Liz Hart, she's at over at Newmark. 0:13:35.280 --> 0:13:38.439 She's the president of Leasing for North America, and that's 0:13:38.600 --> 0:13:41.200 US and Canada. Abigail Deulttle Joints is too. She's our 0:13:41.240 --> 0:13:44.880 market correspondent in our Bloomberg and Directive broker studio. So Liz, 0:13:44.920 --> 0:13:47.160 let's step back and as we think about the last 0:13:47.160 --> 0:13:50.319 few year has been very difficult for certain parts of 0:13:50.400 --> 0:13:53.000 commercial real estate, not all, but certainly like office for example. 0:13:53.720 --> 0:13:56.560 I knows you as an industry always looking forward. What's 0:13:56.600 --> 0:13:58.600 the view forward for commercial real estate. 0:13:58.520 --> 0:14:00.439 In this country? We really see twenty four five is 0:14:00.480 --> 0:14:03.040 the year the real estate gets redefined. We're five years 0:14:03.080 --> 0:14:05.720 post of the pandemic. We're putting that all behind us. 0:14:05.800 --> 0:14:05.920 Now. 0:14:06.240 --> 0:14:09.400 People have experimented with different ways to view commercial real 0:14:09.520 --> 0:14:12.319 estate and now it's really about setting the value and 0:14:12.559 --> 0:14:14.080 creating the value going forward. 0:14:14.480 --> 0:14:16.240 So across key. 0:14:16.240 --> 0:14:18.800 Urban markets, particularly in New York and San Francisco. We're 0:14:18.840 --> 0:14:21.080 seeing demand that we haven't seen in five years, which 0:14:21.160 --> 0:14:23.400 is a really good thing to see because that demand 0:14:23.400 --> 0:14:25.320 will start to create future value in those assets. 0:14:25.720 --> 0:14:28.560 What kind of demand? What are you hearing in terms 0:14:28.560 --> 0:14:28.960 of demand? 0:14:29.000 --> 0:14:30.720 I think the most active segments of the market are 0:14:30.720 --> 0:14:34.440 still financial services across the country. Also, technology has a 0:14:34.560 --> 0:14:38.880 very strong and growing portion of demand, so we're seeing 0:14:38.880 --> 0:14:39.160 both of that. 0:14:39.600 --> 0:14:42.240 So relative to Newmark, let's back up for a moment, 0:14:42.320 --> 0:14:45.000 publicly traded company, one of the top real estate advisory 0:14:45.040 --> 0:14:49.200 firms in the country. Lots of different businesses. What's the 0:14:49.320 --> 0:14:53.320 main business and in terms of this thesis about twenty 0:14:53.360 --> 0:14:56.640 twenty five being the reset, what are the data points 0:14:56.680 --> 0:14:57.200 that you're seeing. 0:14:57.280 --> 0:15:01.600 Well, we've certainly created a purposeful kit of different parts 0:15:01.680 --> 0:15:03.760 that will come together to drive our business forward. So 0:15:03.840 --> 0:15:06.240 we're number one in capital markets across the country. As 0:15:06.280 --> 0:15:07.720 you're looking at what's going to happen in the debt 0:15:07.760 --> 0:15:10.160 markets and what's happening with the debt that will be 0:15:10.240 --> 0:15:13.160 maturing in the next year, there will be an onslaught 0:15:13.200 --> 0:15:15.480 of capital markets activity that will happen across the country 0:15:15.760 --> 0:15:16.680 and that will really. 0:15:16.600 --> 0:15:17.440 Reset the value. 0:15:17.880 --> 0:15:20.600 And that mixed with tenant demand is what's going to 0:15:20.760 --> 0:15:23.200 drive the business forward. So we think the services business 0:15:23.280 --> 0:15:25.560 is going to have really spectacular years in twenty five 0:15:25.600 --> 0:15:26.160 and twenty six. 0:15:26.400 --> 0:15:29.600 So in terms of being the top capital markets, that 0:15:29.760 --> 0:15:32.480 means you're actually doing these financings because we keep hearing 0:15:32.560 --> 0:15:35.200 and talking about this let's call it one trillion to 0:15:35.320 --> 0:15:38.520 one point five trillion dollar wall of maturity is coming, 0:15:38.560 --> 0:15:40.400 but there's been some extent and pretend. 0:15:40.440 --> 0:15:43.240 So you'll be very much involved in that activity. 0:15:43.360 --> 0:15:46.200 Yes, we have an incredibly active debt market team right 0:15:46.280 --> 0:15:49.000 now and they've traded a billion dollars just in REZI 0:15:49.480 --> 0:15:51.680 to or C the office to RESI conversions alone in 0:15:51.760 --> 0:15:53.960 the last couple of months. So we're seeing that turn on. 0:15:54.080 --> 0:15:55.880 So we're last year it was a lot of hey, 0:15:55.920 --> 0:15:57.640 what are we going to do next? It's starting to 0:15:57.720 --> 0:15:59.720 hit trades and then actually move forward, and we think 0:15:59.760 --> 0:16:01.000 that's really optimistic for. 0:16:00.960 --> 0:16:01.480 The year ahead. 0:16:02.040 --> 0:16:04.640 Where the part within commercial real estate, where's the growth, 0:16:04.640 --> 0:16:07.840 where's the opportunity? Because I still feel like in office 0:16:07.880 --> 0:16:10.240 we I'm not sure maybe we're starting to form a bottom, 0:16:10.280 --> 0:16:12.160 but we haven't seen a ton of activity, but I 0:16:12.200 --> 0:16:13.400 know there are other parts that are working. 0:16:13.520 --> 0:16:15.080 Yeah, I mean, I think the opportunity is trophy has 0:16:15.080 --> 0:16:16.720 been talked about a lot, so we know there's opportunity 0:16:16.720 --> 0:16:19.600 in trophy. But right below that, there's a category that's 0:16:19.600 --> 0:16:23.080 being repositioned right now towards having more amenities and being 0:16:23.160 --> 0:16:25.600 better space. That definitely is a segment of the market 0:16:25.640 --> 0:16:28.000 that we think there's a lot of opportunity, particularly in 0:16:28.080 --> 0:16:31.600 places like Seattle, San Francisco, Boston where you do see 0:16:31.640 --> 0:16:33.760 the demand picking up at such a large level. So 0:16:34.280 --> 0:16:36.880 that would be one category. We also see a lot 0:16:36.960 --> 0:16:40.200 of opportunity in office to RESI conversion that can happen. 0:16:40.440 --> 0:16:42.960 We're tracking probably about two percent of the market could 0:16:43.160 --> 0:16:45.280 be converted, and two percent sounds like a lot. And 0:16:45.400 --> 0:16:47.240 I'm a leasing broker, so you're probably wondering, why is 0:16:47.280 --> 0:16:50.240 the leasing broker advocating for an office to RESI conversion. 0:16:50.480 --> 0:16:53.120 But when you have twenty percent of availability across the 0:16:53.320 --> 0:16:56.120 entire market, there's still a lot of space that companies 0:16:56.200 --> 0:16:58.760 can transact on from an office perspective. But we have, 0:16:59.080 --> 0:17:01.400 you know, four to seven million homes that are missing 0:17:01.440 --> 0:17:03.000 in America, and so if we can take that real 0:17:03.120 --> 0:17:05.679 estate and reposition it, I think that's really an exciting 0:17:05.720 --> 0:17:07.639 part of what we'd see in twenty five, but it's 0:17:07.760 --> 0:17:11.560 unlikely to happen without the assistance of tax abatements, government 0:17:11.600 --> 0:17:13.399 interference and really pushing this forward, like we're going to 0:17:13.440 --> 0:17:14.119 have to do this together. 0:17:14.240 --> 0:17:15.680 Well, I was going to say, I've heard that the 0:17:16.160 --> 0:17:18.480 convergence there isn't as easy as it may sound. That 0:17:18.600 --> 0:17:21.520 it's a lot more complicated, particularly like windows and like 0:17:21.680 --> 0:17:24.040 central air and like moving walls and stuff. 0:17:24.680 --> 0:17:27.040 It's physically very complicated, which is why you don't see 0:17:27.040 --> 0:17:29.199 it happening on even a larger part. But what's interesting 0:17:29.320 --> 0:17:32.200 is we started tinkering this more and more post pandemic, 0:17:32.480 --> 0:17:34.320 and there's some very notable projects that will set the 0:17:34.359 --> 0:17:37.080 blueprint going forward that are delivering this year, including twenty 0:17:37.119 --> 0:17:39.960 five water in New York City. So we really see 0:17:39.960 --> 0:17:41.880 this as being something that will pick up. 0:17:42.400 --> 0:17:46.160 As our markets correspondent. Also with this real estate beat, 0:17:46.200 --> 0:17:48.800 I of course took a look at Newmark Stark because 0:17:48.840 --> 0:17:50.960 we don't talk to a lot of real estate folks 0:17:50.960 --> 0:17:53.440 who are around publicly trading companies, or at least that's 0:17:53.480 --> 0:17:55.880 not something that I've been in my coverage so much 0:17:56.000 --> 0:17:57.480 so far over the last year year and a half. 0:17:57.920 --> 0:17:58.720 But it's really interesting. 0:17:58.800 --> 0:18:01.000 So you went public in twenty seven and then up 0:18:01.200 --> 0:18:03.760 and then down, and then up and then down about 0:18:03.760 --> 0:18:06.880 sixty five percent on the real estate downturn, but then 0:18:07.160 --> 0:18:10.400 up almost two hundred percent off of that bottom into today, 0:18:10.800 --> 0:18:13.240 still a little bit below your record high, but it 0:18:13.359 --> 0:18:16.320 tells me that some of those smart investors out there 0:18:16.320 --> 0:18:19.200 are seeing something similar to what you're talking about in 0:18:19.240 --> 0:18:22.240 twenty twenty five being redefined. You have a sense for 0:18:22.400 --> 0:18:24.320 why people are gobbling up your stock like this. 0:18:24.800 --> 0:18:26.919 Yeah, I mean, I think that there's certainly a sentiment 0:18:26.960 --> 0:18:29.440 in the market that the markets are improving. But also 0:18:29.600 --> 0:18:32.480 Newmark has a very big strategy focused on top talent, 0:18:32.720 --> 0:18:34.520 and that's something that's very differentiated from a lot of 0:18:34.560 --> 0:18:37.040 our peers. So with AI and all the changes that 0:18:37.080 --> 0:18:39.200 are happening, we're still doubling down and investing in the 0:18:39.240 --> 0:18:42.160 downturn and top talent, and I think that's incredibly important 0:18:42.240 --> 0:18:45.240