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TikTok Faces US Ban After Appeals Court Refuses to Block Law · Bloomberg Intelligence

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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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0:22
Speaker 3: All right, we got some breaking news for you.
0:24
Speaker 4: TikTok is officially facing a ban in the United States.
0:28
Speaker 4: This comes after the appeals Court refuses to block the
0:32
Speaker 4: law that would ban TikTok. Now, the whole idea is
0:36
Speaker 4: to force a sale of TikTok here in the US
0:38
Speaker 4: from Byteedance to an owner in the United States. Whether
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Speaker 4: or not that happens is definitely a big question mark.
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Speaker 4: Lots of question marks around this. First of all, will
0:48
Speaker 4: Trump stand by this or will he oppose the band
0:53
Speaker 4: and then complicate its enforcement if it was to spin off,
0:56
Speaker 4: and if someone were.
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Speaker 3: To buy it, who would that be? What would the
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Speaker 3: numbers look like?
1:00
Speaker 4: But either way, you take a look at Google and
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Speaker 4: Meta Meta arguably one of the competitors, right because they
1:04
Speaker 4: have Instagram that stopped up over two percent on that headline.
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Speaker 5: Paul, Yeah, this is this is big news in the
1:10
Speaker 5: world of you know, social media digital advertising a metagain
1:14
Speaker 5: up two point two percent today, fifty two week high.
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Speaker 5: But boy, TikTok has become so big so quickly in
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Speaker 5: terms of number of users, their total audience, and the
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Speaker 5: advertising they generate and the retail e commerce at that
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Speaker 5: they generate just a handful of years becomes absolutely huge.
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Speaker 5: Now what did they do? Now? What does Byte Dance
1:36
Speaker 5: do the owner again, the Chinese owner of TikTok, And
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Speaker 5: again what does President elect Trump do? As you were
1:45
Speaker 5: talking about earlier, I'm not sure really his real position
1:49
Speaker 5: on this.
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Speaker 4: So just for some background here, the law was signed
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Speaker 4: back in April. It did have bipartisan support, and it
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Speaker 4: was to force a divestiture from Byte Dance of TikTok
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Speaker 4: here in the US. Now, then, of course there were
2:02
Speaker 4: lots of lawsuits et cetera. Now, leading American investors like
2:05
Speaker 4: Sequoia Capital, General Atlantic, and Susquehanna own significant stake in
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Speaker 4: TikTok parent company By Dance, and that's collectively worth billions
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Speaker 4: of dollars. So that also then complicates the issue with
2:17
Speaker 4: President Trump elect in office as well. Now, By Dance
2:20
Speaker 4: was trying to get it overturned, saying the banning the
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Speaker 4: app is unconstitutional. So let's get more here with Matthew Shettenhelm.
2:27
Speaker 4: He covers this for he's a media litigation analyst for
2:30
Speaker 4: Bloomberg Intelligence.
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Speaker 3: All right, are you surprised?
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Speaker 6: I am not surprised. This is what we expected coming
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Speaker 6: out of the September oral argument. It was a tough
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Speaker 6: hearing for TikTok. What we haven't seen yet and it
2:43
Speaker 6: just popped up on the dock. It is the opinion,
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Speaker 6: the reasoning from the court, and it looks like there's
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Speaker 6: a concurring opinion from at least one judge. But I
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Speaker 6: haven't been able to read the decision yet. But this,
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Speaker 6: this looks like a loss for TikTok. That's what we expected,
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Speaker 6: and that means that if it wants to stop this
3:00
Speaker 6: spain before January nineteenth, it's only realistic option I think
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Speaker 6: is probably going to be to go to the Supreme
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Speaker 6: Court now and try to ask the justices at the
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Speaker 6: Supreme Court to hit pause on that January nineteenth date.
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Speaker 5: And what typically would how would the Supreme Court respond
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Speaker 5: to that type of request hit typically given what this
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Speaker 5: ruling here.
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Speaker 6: Yeah, so I mean it's you know, you go on
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Speaker 6: what's known as the shadow docket at the Supreme Court
3:28
Speaker 6: where the court it looks at emergency relief. And the
3:32
Speaker 6: thing is it's hard to get that. You usually need
3:34
Speaker 6: five justices to vote in support of it. And so
3:39
Speaker 6: there's a risk and again, I want to read this decision,
3:42
Speaker 6: but there's a risk I think for TikTok, that the
3:45
Speaker 6: justices say, look, you know, the DC Circuit got it right,
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Speaker 6: We don't really need to get in the way of this.
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Speaker 6: On the other hand, this is potentially a major First
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Speaker 6: Amendment question, and maybe the justices say, look, this is
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Speaker 6: so important, let's hit pause on that January nineteenth date.
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Speaker 6: We can take it up and then they'd probably decide
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Speaker 6: it by June of this year if they're so inclined.
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Speaker 4: Okay, so let's pretend that we move forward to January nineteenth, right,
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Speaker 4: and that's the date where it would be banned. So
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Speaker 4: if my kids on TikTok, which she's not like does,
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Speaker 4: she automatically can't get on it. But if she goes
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Speaker 4: to like Mexico, she can access TikTok. Like, is that
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Speaker 4: what I'm looking at?
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Speaker 2: Yeah?
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Speaker 6: So yeah, on January nineteenth. The way the law works
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Speaker 6: is it doesn't strip it off of everyone's phones on
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Speaker 6: that date. The way the law works, it says that
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Speaker 6: as of that date, any company that carries the app
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Speaker 6: in its app store or that carries TikTok on servers
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Speaker 6: in a way that allows the app to update no
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Speaker 6: longer can do so. If they do so, they're at
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Speaker 6: the risk of gigantic penalties. It's something like five thousand
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Speaker 6: dollars per user. And so if the DJ is willing
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Speaker 6: to enforce it, which is going to be another question,
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Speaker 6: President Trump, you know, potentially could tell his DJ, look,
5:03
Speaker 6: don't worry about enforcing that law. But if you're a
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Speaker 6: company that carries TikTok in your app store, are you
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Speaker 6: going to take a chance that President Trump is not
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Speaker 6: going to enforce something that could reach billions of dollars
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Speaker 6: in liability against you? I'm not so sure.
5:17
Speaker 5: What do we know about President elect Trump and his
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Speaker 5: administration how they're viewing this particular issue. Have they opined
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Speaker 5: on this yet?
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Speaker 6: Yeah, Well, so Trump's been back and forth on this issue.
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Speaker 6: So President Trump was the first one to propose a
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Speaker 6: TikTok fan and his administration moved ahead with one and
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Speaker 6: then only then fell in you know, in trouble in
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Speaker 6: court because he tried to do it himself without Congress.
5:42
Speaker 6: Then this time Congress did it and passed it. President
5:46
Speaker 6: Biden signed it, but then Trump reversed himself, and now
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Speaker 6: Trumps has said publicly, look, we don't want to help Meta.
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Speaker 6: I don't support a TikTok fan anymore. The problem is
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Speaker 6: it's already law, it's already done, and I think it's
6:01
Speaker 6: a It's a difficult thing for him to convince Congress,
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Speaker 6: which passed this on a bipartisan basis, to reverse itself,
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Speaker 6: and so his only options would be kind of the
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Speaker 6: unusual course, Oh, we're not going to enforce a law
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Speaker 6: that Congress just passed, or you know, you know, or
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Speaker 6: approving some sort of sale a divestiture, but there's no
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Speaker 6: indication that China would allow that sort of a divestiture.
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Speaker 4: All right, really great stuff, Really appreciate it. Thank you
6:30
Speaker 4: so very much for jumping on with us. Matthew Shetenhelm,
6:33
Speaker 4: media litigation channalyst for Bloomberg Intelligence. And then of course,
6:36
Speaker 4: like TikTok is a really big customer of Oracle, what
6:38
Speaker 4: does that mean for Oracle? Meta has Instagram? It's that
6:41
Speaker 4: good for Meta et cetera. So going down that rabbit.
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Speaker 3: Hole as well.
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7:05
Speaker 5: A lot of economic data popping out today. Leading off
7:08
Speaker 5: this morning at eight thirty. Change in non farm payrolls
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Speaker 5: cam in it better than expected twohundred twenty seven thousand
7:13
Speaker 5: versus the consensus of two hundred and twenty thousand. The
7:15
Speaker 5: revision from the last month was from twelve thousand to
7:18
Speaker 5: thirty six thousand, So some good numbers there. Tom Gimmel
7:21
Speaker 5: joins us. We always love to check in with Tom
7:22
Speaker 5: one on jobs Day. Tom is the founder and board
7:25
Speaker 5: metal member of LaSalle Network, one of the leading staffing
7:29
Speaker 5: and recruiting firms in the country. Tom, pretty solid number.
7:33
Speaker 5: What would you take away from the non farm payroll data?
7:35
Speaker 7: Well, number one, I'm not wearing any Sophora or Lulu
7:38
Speaker 7: Lemon at the moment.
7:40
Speaker 3: Thanks for clarifying.
7:41
Speaker 7: Uh huh, yeah, I want to make sure we're clear
7:43
Speaker 7: on that, but no, these this is you guys know,
7:46
Speaker 7: when we're putting up over two hundred thousand jobs, you
7:50
Speaker 7: know how I respond that things are great, and we've
7:53
Speaker 7: got got to look at that as a very strong
7:56
Speaker 7: positive Average hourly wages up a little bit, average hours
8:02
Speaker 7: worked up a little bit, revisions were not bad. That's
8:07
Speaker 7: a good thing. Like everything is pointing positively. I really
8:11
Speaker 7: hope that the Fed does not lower interest rates. I
8:14
Speaker 7: don't think we need it. I think it's something we're
8:16
Speaker 7: going to need the dry powder in the latter part
8:19
Speaker 7: of next year and to make sure that we realize
8:22
Speaker 7: this economy is going really strong and with unemployment inching
8:25
Speaker 7: up that that's exactly what everybody's been saying, we need
8:28
Speaker 7: curb inflation.
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Speaker 4: So the counter to that is the household survey being
8:32
Speaker 4: a lot weaker.
8:32
Speaker 3: What'd you make of that, listen.
8:36
Speaker 7: I think that if we're looking for areas of weakness,
8:40
Speaker 7: this is why economists have jobs, They're always going to
8:43
Speaker 7: find some number that goes against the grain of what
8:45
Speaker 7: everything else says. My feeling is what we know is
8:49
Speaker 7: factual more people are working. Unemployment historically at four point
8:53
Speaker 7: two is still very very low and unemployment is going
8:57
Speaker 7: to go up. Why is it going to go up
8:59
Speaker 7: because of Dodge or doge is when we do that,
9:02
Speaker 7: when musk and and vevect it in there and we
9:05
Speaker 7: shed government employees, they are going to file for unemployment
9:08
Speaker 7: and they don't automatically convert to the private sector. And
9:12
Speaker 7: so we're going to have a situation where I believe
9:15
Speaker 7: unemployment is going to go up naturally, and we're going
9:18
Speaker 7: to need to be able to have that lever to
9:20
Speaker 7: to pull of lowering interest rates, and we don't want
9:22
Speaker 7: to use it now.
9:24
Speaker 5: Average hourly earnings on a year of a year basis
9:27
Speaker 5: of four percent a little bit better than the expectation.
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Speaker 7: What's the wage environment hold? I mean, think about that
9:32
Speaker 7: for a second. If somebody gets a three percent raise
9:36
Speaker 7: as a cost of living increase the cost of living
9:39
Speaker 7: adjustment COLA, we say that that's what corporate America does
9:43
Speaker 7: all the time. We're talking about four percent average hourly
9:46
Speaker 7: earnings year over year. That's that's a third better than
9:49
Speaker 7: what average increases are in corporate America. I think those
9:52
Speaker 7: are really good.
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Speaker 5: Numbers inflationary for you or is this just again a
9:57
Speaker 5: healthy labor market?
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Speaker 7: No, I think it's a little bit of inflationary, but
10:01
Speaker 7: we're looking at you know what we still have. We
10:04
Speaker 7: all go to restaurants, we see that there isn't enough
10:07
Speaker 7: workers and even though that's where the majority, so much
10:09
Speaker 7: of the hiring was done this past month and going
10:12
Speaker 7: into the holiday season, you're going to have more of that.
10:16
Speaker 7: There's a lot of positive feelings, whether you whether you
10:19
Speaker 7: like the results of the election or not, that it's
10:21
Speaker 7: anti regulation and it's really pro business, and so companies
10:26
Speaker 7: are going to be hiring and wages are going to
10:28
Speaker 7: go up because in order to get people for the
10:30
Speaker 7: jobs that are in demand, i e. Service jobs, or
10:34
Speaker 7: to get people to leave in white collar jobs, you're
10:36
Speaker 7: going to have to pay more and it's going to
10:38
Speaker 7: increase that dollar amount. But I think, yeah, I want
10:42
Speaker 7: to repeat, when we get more federal workers who are
10:45
Speaker 7: filing for unemployment, that number is going to go up
10:47
Speaker 7: and you'll see the inflation come down naturally.
10:49
Speaker 4: Yeah, that's such a good point that we forget that
10:51
Speaker 4: that that that's coming at some point over the next
10:54
Speaker 4: few years. Thanks so much, Tom, really appreciate a Ton Gimbal,
10:57
Speaker 4: founder and board member of Lacell Network.
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11:16
Speaker 4: All right, let's get back to the economic data of
11:18
Speaker 4: the morning. That if I dare say, goldilocks a job report.
11:21
Speaker 4: Jeffrey Cleveland is chief economists over at Peyton and Regal,
11:24
Speaker 4: and he joins us now as he does every job's Friday.
11:27
Speaker 3: Hey, Jeffrey, is this a Goldilocks report?
11:30
Speaker 6: Like?
11:30
Speaker 4: Can I say that? Or is there another word I
11:32
Speaker 4: can use.
11:32
Speaker 3: To describe this?
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Speaker 1: Yeah, goldilocks, soft landing. I think both of those phrases work.
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Speaker 1: You've got decent headline job growth. The three month average,
11:42
Speaker 1: I think was one hundred and ninety thousand. Sorry, the
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Speaker 1: twelve month average was one hundred ninety thousand. The three
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Speaker 1: month averages around one hundred and eighty thousand, So that's
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Speaker 1: enough I think to keep downward pressure on the unemployment rate.
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Speaker 3: So that's good.
11:54
Speaker 1: There's probably enough concern about the unemployment rate ticking up
11:59
Speaker 1: like it did in the port to four point two.
12:01
Speaker 1: So from a risk management perspective, I think the FED,
12:04
Speaker 1: you know, keeps on cutting, so we get a cut
12:06
Speaker 1: in December, but there's no evidence of a recession here.
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Speaker 1: So you've got you know, continued economic growth, no recession,
12:13
Speaker 1: and a FED that is going to continue to cut
12:16
Speaker 1: rates over the next twelve months. So I think that's goldilocks.
12:18
Speaker 1: That's that's great for risk assets, great for risk assets.
12:21
Speaker 1: That's kind of where I was going to go, Jeffrey.
12:22
Speaker 5: I'm just wondering how you think our Federal Reserve is
12:25
Speaker 5: going to view this data here this morning before their
12:27
Speaker 5: December eighteenth meeting.
12:30
Speaker 1: Well, I mean they're tasked by Congress with keeping us
12:32
Speaker 1: at full employment, Paul, right, So you know they want
12:35
Speaker 1: to keep that unemployment rate low. They they don't want
12:37
Speaker 1: to risk that it continues to tick up. So I
12:39
Speaker 1: think that's top of mind. The only thing preventing them
12:43
Speaker 1: from focusing on the labor market was inflation. But I
12:46
Speaker 1: think inflation is cool. The pay If I could give
12:48
Speaker 1: a pitch for the paid and regal chart of the
12:50
Speaker 1: week out this morning, I guess you know, we looked,
12:53
Speaker 1: we looked at market based core PCE, and that looks
12:57
Speaker 1: bang on with the Fed's target. You know, it's running
13:00
Speaker 1: at abouzero point two percent month to month for the
13:03
Speaker 1: last four or five months.
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Speaker 3: So that's good enough.
13:05
Speaker 1: Inflation is back to target, So focus on the labor
13:08
Speaker 1: So I think that keeps the FED cutting ball. At
13:10
Speaker 1: the December meeting, we can debate about how much they
13:13
Speaker 1: really need to cut next year. Yeah, they could probably
13:15
Speaker 1: afford to go more slowly, sure, but cutting they will.
13:18
Speaker 4: So Jeffrey, here's the counter. So Tom Gimble, we just
13:21
Speaker 4: talked to him, founder and board member of Lesal Network,
13:24
Speaker 4: was talking about the fact that once the Doge Office
13:26
Speaker 4: or the Department of Government Efficiencies just slashes government workers,
13:30
Speaker 4: all those people are not going to be going to
13:31
Speaker 4: the private sector necessarily, so the unployment rate will rise
13:34
Speaker 4: and the FED is going to need a lot more
13:35
Speaker 4: dry powder to combat that, which means that maybe they
13:38
Speaker 4: don't need to hike anymore right now, sorry, cut anymore
13:41
Speaker 4: right now.
13:41
Speaker 3: What do you make of that argument?
13:43
Speaker 1: Well, I think from the FED essential banker perspective, they're
13:46
Speaker 1: going to say, well, we're going to wait until we
13:48
Speaker 1: see the actual details of any plan to slash spending
13:53
Speaker 1: or cut payrolls. So until we see that we have
13:55
Speaker 1: more definitive details, that's not going to alter the fence plan.
13:59
Speaker 1: The plant is going to look at what's going on
14:00
Speaker 1: with their jrajectory for growth, the unemployment rate right now,
14:04
Speaker 1: and inflation, and then make decisions based on that. My
14:07
Speaker 1: only thing on this Doge thing is that a lot
14:09
Speaker 1: of the government employees are at the state and local level,
14:12
Speaker 1: not as many at the federal level. So I wonder
14:15
Speaker 1: how much, well how much you could really slash and
14:18
Speaker 1: burn there, So that might not I think once people
14:21
Speaker 1: get into office, they might realize the details reality is
14:24
Speaker 1: not quite what they thought it was, and they might
14:26
Speaker 1: be more difficult to make cuts. You know, however motivated
14:30
Speaker 1: they are to make cuts, So I think that's an
14:32
Speaker 1: issue here. We'll have to see how this plays out.
14:34
Speaker 5: TBD, TBD, Jeffrey. So we get this pretty solid labor
14:39
Speaker 5: number here. How do you view the US consumer? It
14:43
Speaker 5: seems like the US consumer hear, she wants a job
14:47
Speaker 5: he or she has it, and wages are going higher,
14:49
Speaker 5: pretty decent, Yeah, I.
14:51
Speaker 1: Mean average AULI earning's ticked up. Paul, you saw that,
14:53
Speaker 1: So that's good. So for US paid in regal view
14:55
Speaker 1: on consumer is look at income growth. If the consumer
14:59
Speaker 1: and aggregate can continues to have income growth, sure there's
15:02
Speaker 1: always pocketed pockets of weaknesses, but overall, aggurate income growth
15:06
Speaker 1: is still humming along at five percent year on year.
15:09
Speaker 1: When you account for you know, what people are being
15:11
Speaker 1: paid and how much they're working, how many people are working.
15:14
Speaker 1: That looks excellent to us. That that's the reason why Paul,
15:17
Speaker 1: in the last eight quarters, US GDP has continued to
15:20
Speaker 1: be two to three percent. Consumer spending has continued to
15:23
Speaker 1: pump along, and it's because of income growth. So I
15:26
Speaker 1: don't see anything in this report that alters our view
15:29
Speaker 1: on that. So that's one of the reasons why we
15:31
Speaker 1: remain bullish on the US economy.
15:33
Speaker 4: All right, so you think the Fed's going to cut
15:35
Speaker 4: then in December, this is all fine enough to do that.
15:37
Speaker 4: Then what as you raised?
15:40
Speaker 1: I think you know, the argument that central bankers would
15:43
Speaker 1: make is that as you get closer to neutral, where
15:45
Speaker 1: you think you'll kind of settle in that you can
15:47
Speaker 1: slow down, so you can as you approach the intersection,
15:50
Speaker 1: if you will, Alex, you know, you maybe you take
15:52
Speaker 1: your foot off the gas a little air and your
15:55
Speaker 1: car hasn't blow it down, right, Yeah, some people just
15:58
Speaker 1: power through. I don't know, but I think that's what
16:01
Speaker 1: they'll do. So, you know, right now we have penciled
16:03
Speaker 1: in four cuts next year, so one per quarter. I
16:05
Speaker 1: think that's a decent starting point at this at this
16:08
Speaker 1: at this juncture. And as you know, if we've been
16:11
Speaker 1: talking for a while now, I've been hawkish most of
16:14
Speaker 1: the last three years, you know, more worried about inflation.
16:17
Speaker 1: So I think this is a sign of paydon you know,
16:19
Speaker 1: being nimble, not being dogmatic. The facts have changed, Inflation
16:22
Speaker 1: is cooled, so the federal be cutting over the next
16:24
Speaker 1: twelve months.
16:24
Speaker 5: Jeffrey, thank you so much for joining us. Always appreciate
16:26
Speaker 5: getting a few minutes sorry times, particularly on these job
16:29
Speaker 5: stays at Jeffrey Cleveland. He's a chief economists at Peydon
16:32
Speaker 5: and Regal. He's out there in LA and joining us
16:35
Speaker 5: via zoom.
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16:55
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16:57
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17:03
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17:33
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Speaker 5: to pre pandemic levels. Where's the office real estate market
17:41
Speaker 5: in this country do you think today?
17:42
Speaker 3: Well, thank you for having me. So the office still remains.
17:46
Speaker 3: If it's a Class A, those properties are still aring
17:48
Speaker 3: very very well.
17:49
Speaker 8: So it's trying to see which which of the what
17:52
Speaker 8: sectors in the market and which type of classes the property.
17:55
Speaker 8: So some of the Class C properties that you're going
17:56
Speaker 8: to see that's really what a lot of the things
17:59
Speaker 8: you're reading about. I read about some stuff this week
18:01
Speaker 8: in the New York City marketplace as well for office,
18:04
Speaker 8: and so looking also when people are is this ripe
18:08
Speaker 8: for the conversion to rental, what are we going to
18:10
Speaker 8: do with this?
18:11
Speaker 3: What is that office?
18:12
Speaker 8: And how much money does it take to actually go
18:14
Speaker 8: in and either take out the loan or even fix
18:17
Speaker 8: the property.
18:18
Speaker 3: And so office is still going to remain a little bit.
18:21
Speaker 8: You know, the CBS report came out that it was
18:22
Speaker 8: a ten percent delinquency rate, which is pretty high for office,
18:26
Speaker 8: and they were slated that they expected that to happen
18:29
Speaker 8: months ago. So it's taken a while for the delinquency
18:31
Speaker 8: rates on the office to generally creep up there.
18:35
Speaker 3: But I think people are still looking at it as
18:37
Speaker 3: a little bit of a concern and looking.
18:39
Speaker 8: To sort of say, where the opportunities out there, whether
18:41
Speaker 8: it's the conversions, whether it's now time to retrade and
18:44
Speaker 8: think about repricing the office market. Hopefully there's going to
18:48
Speaker 8: be somewhat of a mandate for return to office, so
18:50
Speaker 8: that we look around.
18:51
Speaker 3: This place is always bustling, but there are a lot
18:54
Speaker 3: of offices that.
18:55
Speaker 8: Are still quite empty and how are employer is going
18:58
Speaker 8: to be mandating those?
19:00
Speaker 4: So for the Class C office space, what happens to
19:03
Speaker 4: those buildings? C?
19:04
Speaker 3: Class C? What did I say?
19:06
Speaker 5: xCE But that's like that's not good right right?
19:09
Speaker 3: But yeah, like what is that?
19:11
Speaker 4: Can you give us some like broad examples of what
19:13
Speaker 4: that would look like and then what happens to that
19:15
Speaker 4: real esty?
19:15
Speaker 8: Yeah, so that would be older stock that could be
19:17
Speaker 8: in Manhattan or in any city around the country that
19:20
Speaker 8: probably needs a lot of work to renovate it to
19:23
Speaker 8: get it to where the amenities that you guys have
19:26
Speaker 8: such a Bloomberger some of the even where our offices
19:28
Speaker 8: are now, So people are looking for those amenities to
19:30
Speaker 8: get them to a Class A building. That's a lot
19:33
Speaker 8: of capital that needs to be infused in that. So
19:35
Speaker 8: people want that a little bit more of an experience
19:37
Speaker 8: in the office. There's more focus on health than feeling
19:40
Speaker 8: good about where you are. Those Class c's are probably
19:43
Speaker 8: forty to fifty years old and don't have that feeling
19:46
Speaker 8: in that look.
19:47
Speaker 5: But that I'm thinking anything but Class A in this
19:49
Speaker 5: marketplace in New York City, I'm thinking that's seventy percent
19:53
Speaker 5: of the square footage.
19:54
Speaker 3: I mean, it's a ton.
19:55
Speaker 5: I look at every building up and down Third Avenue,
19:57
Speaker 5: every building up and down lower Park Avenue, like Park
19:59
Speaker 5: Avenue just above Grand Central Station was in the news
20:02
Speaker 5: this week. I think you know that's got marked down
20:05
Speaker 5: below the value the mortgage. I mean, there's so much
20:08
Speaker 5: of that square footage in the city. Nothing's happening to that.
20:12
Speaker 5: So you can't renovate that stuff, can you?
20:13
Speaker 8: So a lot of it that So you're also looking
20:16
Speaker 8: at external renovations versus internal and recreating that space for
20:19
Speaker 8: the tenant experience, and so a lot of it can
20:21
Speaker 8: get changed internally for the tenant and even the lobbies.
20:25
Speaker 3: So yeah, you're not going to have the glass windows.
20:27
Speaker 8: And the beautiful outside facade, but interior for the tenant improvements,
20:32
Speaker 8: you can make those changes to make it more palatable
20:35
Speaker 8: for the consumer.
20:36
Speaker 3: To use that party.
20:37
Speaker 4: Again, to your point, it's still expensive to do that.
20:40
Speaker 4: And also we don't know what the return to office, Mandy,
20:42
Speaker 4: it's going to be for that to do.
20:44
Speaker 8: So if.
20:46
Speaker 3: What's like the next solution, So.
20:47
Speaker 4: If there's not the money to kind of renovate it, right,
20:50
Speaker 4: does it just go to the bank, does it go
20:52
Speaker 4: belly up?
20:52
Speaker 3: What happens to it.
20:53
Speaker 8: So we read there's a very large, too large developers
20:56
Speaker 8: in New York that are taking a platform they just
20:59
Speaker 8: started on nationally that they're going to convert some of
21:02
Speaker 8: these offices to residential.
21:04
Speaker 3: Now, we've been reading about this a lot, and you'll
21:05
Speaker 3: have a.
21:06
Speaker 8: Lot of people talking about the negatives to positive but
21:08
Speaker 8: these are experienced developers who have already created some of
21:11
Speaker 8: that conversion from office to residential. So not all of
21:14
Speaker 8: the stock will convert, but some of it will really
21:16
Speaker 8: really successfully with the right developer, and that's a really
21:19
Speaker 8: exciting thing, and that would be across nationwide. It's not, again,
21:22
Speaker 8: it's not one hundred percent solution, but it's a really
21:24
Speaker 8: nice type of solution for those types of assets out there.
21:27
Speaker 5: What's happening with I guess commercial real estate mortgages as
21:31
Speaker 5: they mature and now I got a comeback and rates
21:35
Speaker 5: are so much higher and my loan to value ratio
21:37
Speaker 5: is all screwed up now, so I need new equity.
21:40
Speaker 3: What happens to those types of situations?
21:41
Speaker 5: What are we seeing out there?
21:43
Speaker 8: Yeah, so we just saw this past week Valley National
21:47
Speaker 8: solo a billion dollar portfolio of their loans to Brookfield
21:52
Speaker 8: and so those are positive things.
21:53
Speaker 3: When sales like that can happen and they sell at
21:55
Speaker 3: a super It was a very slight discount, so that's light.
21:58
Speaker 3: So this was good. This was good, and Valley National
22:00
Speaker 3: is going to retain.
22:01
Speaker 8: Servicing those loans, so they just really wanted it off
22:03
Speaker 8: their balance sheet and Brickfield's going to take that over.
22:06
Speaker 8: Deutsche Bank the billion dollar portfolio of THEIRS, which was unique,
22:10
Speaker 8: and why that's good news is that that portfolio had
22:13
Speaker 8: a lot of office in there. So the fact that
22:15
Speaker 8: that was able to trade and close, that's really optimistic.
22:18
Speaker 3: When you look at it. So have we reached our floor?
22:20
Speaker 3: We are we in a stable environment?
22:22
Speaker 8: Looking at those billion dollar transactions, you know, one of
22:25
Speaker 8: those would have been a highlight reel from the news.
22:27
Speaker 8: Two happening in a week, or three even happening in
22:29
Speaker 8: a week, that shows that there is movement and that
22:31
Speaker 8: there is some activity there.
22:33
Speaker 3: To your port on rates and what's.
22:35
Speaker 8: Going to happen, you know, we think the Feds are
22:37
Speaker 8: going to cut again this month, and so consumers are
22:41
Speaker 8: looking on the sidelines and figuring out the money's out there.
22:45
Speaker 3: It's just nobody likes the prices and the rates. Right,
22:47
Speaker 3: of course, the money's there.
22:49
Speaker 4: Yeah, got to get the bid, ask you got to
22:51
Speaker 4: get it just to come in and how long that
22:52
Speaker 4: winds up taking?
22:53
Speaker 5: Cry? Let you go.
22:54
Speaker 3: How's Boston right now? So interesting?
22:57
Speaker 8: Boston is an interesting market when you when you look
22:59
Speaker 8: at it, we're reading about it in the papers. It's
23:02
Speaker 8: a little bit slower to get back to where some
23:04
Speaker 8: of the other cities are doing. I went to school
23:07
Speaker 8: in Boston, so it's kind of close to my heart,
23:09
Speaker 8: but it is a little bit slower to get back,
23:12
Speaker 8: both on the residential and on the office commercial side,
23:14
Speaker 8: to where some of the other cities we're seeing have
23:17
Speaker 8: rebounded a little bit quicker.
23:18
Speaker 5: All right, and good stuff, Lisai, thank you so much
23:21
Speaker 5: for joining us, Lisa to He's a managing partner and
23:23
Speaker 5: head of real estate for Eisner Amper joining us here
23:26
Speaker 5: in our Bloomberg Interactive Broker studio. I like to think
23:28
Speaker 5: we're in a A plus.
23:30
Speaker 1: Oh my god, yeah, we're light.
23:31
Speaker 3: A plus plus.
23:32
Speaker 4: Everyone's jealous of our snacks and you should have seen it, Lisa.
23:34
Speaker 4: We had a whole Christmas fair in the last few days.
23:37
Speaker 3: It was jamming upstairs. This was snackflow was unbelievable.
23:41
Speaker 5: So yeah, Bloombergs. They figured out this get people back
23:43
Speaker 5: to the office kind of thing, so it's all working out.
23:46
Speaker 2: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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