Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

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Dallum Steel, Paul Sweeney, You're live here on our Bloomberg Interactive Broker Studio. We are streaming live on YouTube's ahead of It, the Bloomberg Ahead of YouTube dot com search Bloomberg Podcast Live, and that's where you'll find this is. John is just reporting some disupporting numbers out of Nike, out of FedEx. And I'm going to approach the analysts we have from BI kind of the same way of my questioning, and let's start with Punham Goyle, senior US retail and e commerce analysts, and we'll start with the Nike and put them The question I have for you is kind of the same one I'm going to have for Lee Klascal about FedEx and how much of the were kind of the weaker than expected results was company specific, i e. Not executing well versus maybe just a weakening consumer out there. How does their applot in Nike, so Nike.

Dallum Steel, Paul Sweeney, You're live here on our Bloomberg Interactive Broker Studio. We are streaming live on YouTube's ahead of It, the Bloomberg Ahead of YouTube dot com search Bloomberg Podcast Live, and that's where you'll find this is. John is just reporting some disupporting numbers out of Nike, out of FedEx. And I'm going to approach the analysts we have from BI kind of the same way of my questioning, and let's start with Punham Goyle, senior US retail and e commerce analysts, and we'll start with the Nike and put them The question I have for you is kind of the same one I'm going to have for Lee Klascal about FedEx and how much of the were kind of the weaker than expected results was company specific, i e. Not executing well versus maybe just a weakening consumer out there. How does their applot in Nike, so Nike.

With all companies specific and I would say that you know a lot of this. We expected Nike's results will stay weak until they get their inventory realigned with sales, and that's not going to happen overnight. It will take at least two to three quarters at the minimum. So we do have some downside or some weak results for the next few quarters. But I will say that they are making the right moves. The new CEO, Elliott Hill, has a plan that we think will work. It will drive Nike back to be the lead and get the mind share that it has held for so many decades.

With all companies specific and I would say that you know a lot of this. We expected Nike's results will stay weak until they get their inventory realigned with sales, and that's not going to happen overnight. It will take at least two to three quarters at the minimum. So we do have some downside or some weak results for the next few quarters. But I will say that they are making the right moves. The new CEO, Elliott Hill, has a plan that we think will work. It will drive Nike back to be the lead and get the mind share that it has held for so many decades.

In that case, have we seen the bottom in the stock praise?

In that case, have we seen the bottom in the stock praise?

Well, I mean the shares have clearly come off from their highs and they're down again today seven percent. I'd say the bad news is out. So from here they should continue to realign inventory. This upcoming fiscal fourth quarters of theirs is when they'll probably make the biggest push and we should hopefully see inventory begin to normalize over the next two to three quarters.

Well, I mean the shares have clearly come off from their highs and they're down again today seven percent. I'd say the bad news is out. So from here they should continue to realign inventory. This upcoming fiscal fourth quarters of theirs is when they'll probably make the biggest push and we should hopefully see inventory begin to normalize over the next two to three quarters.

Compared to their competitors. This inventory issue, this I would argue, mismanagement of inventory. It feels to me, is it maturely different than its competitors.

Compared to their competitors. This inventory issue, this I would argue, mismanagement of inventory. It feels to me, is it maturely different than its competitors.

Yeah, absolutely, this is a Nike specific issue. So what happened here is that Nike has a lot of classic inventory that just isn't resonating with customers, and therefore they have to find ways to clear that, which they'll do through their outlets and the value wholesale channels. The other competitors, if you're talking about Adidas, whom or others, they don't have this issue because they have the right inventory for the most part in place, and therefore they will not have as many discounts as Nike will have over the coming three to nine months.

Yeah, absolutely, this is a Nike specific issue. So what happened here is that Nike has a lot of classic inventory that just isn't resonating with customers, and therefore they have to find ways to clear that, which they'll do through their outlets and the value wholesale channels. The other competitors, if you're talking about Adidas, whom or others, they don't have this issue because they have the right inventory for the most part in place, and therefore they will not have as many discounts as Nike will have over the coming three to nine months.

At the same time, though, they talked about gross margins being also impacted by tariffs, and that would be an industry issue.

At the same time, though, they talked about gross margins being also impacted by tariffs, and that would be an industry issue.

Right, the tariffs isn't an industry issue, but the decline that they guide it to, the four hundred to five hundred basis point decline and fiscal fourth quarter, the bulk of it is due to the markdowns that they will face as they clear this unwanted inventory. So terra stouts have an impact, but it's a very small part of that margin compression that they're forecasting.

Right, the tariffs isn't an industry issue, but the decline that they guide it to, the four hundred to five hundred basis point decline and fiscal fourth quarter, the bulk of it is due to the markdowns that they will face as they clear this unwanted inventory. So terra stouts have an impact, but it's a very small part of that margin compression that they're forecasting.

Put them.

Put them.

How did the company get in this position where they had this inventory that wasn't resonating with customers because I think of Nike as like really on top of knowing what the customers want and delivering some really cool products.

How did the company get in this position where they had this inventory that wasn't resonating with customers because I think of Nike as like really on top of knowing what the customers want and delivering some really cool products.

What happened?

What happened?

I think this all happened with the previous leadership when John Donaho came on board right around the pandemic, and he had a strategy to go digital, so essentially pulling out of many wholesale channels in a meaningful way where Nike was really focused on driving growth in digital. The product was changing, but it wasn't changing enough. You know. You saw, for example, they used a shoe and they just rolled out multiple color waves in it. There wasn't as much innovation as what the consumer is used to it from Nike. So it was execution. It was just not having the right product. And I think they're back on their game now. They have a leader at home that knows the product that was a merchant. So they do have some work to do, but I think they're moving in the right direction.

I think this all happened with the previous leadership when John Donaho came on board right around the pandemic, and he had a strategy to go digital, so essentially pulling out of many wholesale channels in a meaningful way where Nike was really focused on driving growth in digital. The product was changing, but it wasn't changing enough. You know. You saw, for example, they used a shoe and they just rolled out multiple color waves in it. There wasn't as much innovation as what the consumer is used to it from Nike. So it was execution. It was just not having the right product. And I think they're back on their game now. They have a leader at home that knows the product that was a merchant. So they do have some work to do, but I think they're moving in the right direction.

Who took their share while they were stumbling and can they get it back?

Who took their share while they were stumbling and can they get it back?

Everyone beyond the Hokah's, Adidas, you name it. I mean, you know, when I went to a foot locker. Let's say seven years ago, it was largely Nike. Today, when I walk into a foot locker, I see everything in there. I see Nike, I see ya, and I see hokah. So everyone took a little bit of it.

Everyone beyond the Hokah's, Adidas, you name it. I mean, you know, when I went to a foot locker. Let's say seven years ago, it was largely Nike. Today, when I walk into a foot locker, I see everything in there. I see Nike, I see ya, and I see hokah. So everyone took a little bit of it.

Yeah, hokas. I didn't even know what where they came from. But I see a lot of the kids around here wearing them well.

Yeah, hokas. I didn't even know what where they came from. But I see a lot of the kids around here wearing them well.

And the adults too are starting to wear them. They're super cool.

And the adults too are starting to wear them. They're super cool.

Well they're adults, but they're kids to me here at Bloomberg But even like the and they're wearing them to work, by the way, the.

Well they're adults, but they're kids to me here at Bloomberg But even like the and they're wearing them to work, by the way, the.

Older kids are still doing it, are they. Yeah, this is not just like a twenty five year old thing. This is a broader I think that David Weston has worn up.

Older kids are still doing it, are they. Yeah, this is not just like a twenty five year old thing. This is a broader I think that David Weston has worn up.

That's that was so disappointing to me on.

That's that was so disappointing to me on.

So I don't know if that's one hundred percent true. It could be spending false rumors, but it could be true. All I put them, thanks, not really appreciate it. Put them. Goyle, Senior US e Commerce some retail analysts at Bloomberg Intelligence.

So I don't know if that's one hundred percent true. It could be spending false rumors, but it could be true. All I put them, thanks, not really appreciate it. Put them. Goyle, Senior US e Commerce some retail analysts at Bloomberg Intelligence.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Apple coarcklay and Android auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

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This is Bloomberg Intelligence Radio. Still a top tay for the market. SMP is off by seven tenths of one percent, of nastacs off by about six tenths of one percent. It just feels like a steady as she goes. Yesterday during the close, you could see the SMP desperately wanting to turn green, could not do it, and we just continue to kind of roll over. We also have about four point five trillion dollars worth of options expiring too, So what do you do? Like, is it safety? Is it run for the hills? Is it just wait till the second? Is it just hold everything until the back half of the year.

This is Bloomberg Intelligence Radio. Still a top tay for the market. SMP is off by seven tenths of one percent, of nastacs off by about six tenths of one percent. It just feels like a steady as she goes. Yesterday during the close, you could see the SMP desperately wanting to turn green, could not do it, and we just continue to kind of roll over. We also have about four point five trillion dollars worth of options expiring too, So what do you do? Like, is it safety? Is it run for the hills? Is it just wait till the second? Is it just hold everything until the back half of the year.

Yeah, it feels like April second seems like it's just gonna be a bigger and bigger date for some folks in this marketplace that we're just looking for a little sense of clarity on maybe one of these big issues being the tariffs, and you know how broad they will be and whether and who will they be placed upon and take if you can take that out of the equation a little bit. Maybe that will be a positive catalyst. The uncertainty was called out by a lot of companies. We heard Nike earlier in the day. FedEx also in their stock trading off nine percent on some weaker than expected earnings. That's a fifty two week low for that stock. Lee Klascal joins is he's a senior transport logistics and shipping analysts who follows FedEx for Bloomberg Intelligence. Lee, I'm gonna ask kind of the same question I asked of Putnam Goyle about Nike, which is how much of the underperformance in FedEx results was due to just maybe the market being a little softer, with the consumer being a little softer, or FedEx specific issues.

Yeah, it feels like April second seems like it's just gonna be a bigger and bigger date for some folks in this marketplace that we're just looking for a little sense of clarity on maybe one of these big issues being the tariffs, and you know how broad they will be and whether and who will they be placed upon and take if you can take that out of the equation a little bit. Maybe that will be a positive catalyst. The uncertainty was called out by a lot of companies. We heard Nike earlier in the day. FedEx also in their stock trading off nine percent on some weaker than expected earnings. That's a fifty two week low for that stock. Lee Klascal joins is he's a senior transport logistics and shipping analysts who follows FedEx for Bloomberg Intelligence. Lee, I'm gonna ask kind of the same question I asked of Putnam Goyle about Nike, which is how much of the underperformance in FedEx results was due to just maybe the market being a little softer, with the consumer being a little softer, or FedEx specific issues.

Hey, Paul, I think it's a lot has to do with the fact that the macros is a little weaker than they thought. And you know, the weakness that they were seeing is in the business to business biomes as well as the industrial economy. You know, they have a lot of exposure to the industrial economy, and their FedEx free business just are less than truckload business. Uh. That business kind of disappointed on the earnings while it's a parcel business express business. Uh, slightly bet expectations. You know, the company is going through a major transformation. It's been operated as a uh kind of bloated concern for a number of years. Uh. I know, over the last couple of years, they've been taking proactive steps into kind of writing that and reducing costs. They're also you know, doing things that that that management thought was kind of taboo, if you will. They're now uh uh combining their ground and express networks in certain regions, and they're gonna, you know, eventually do that in the United States. Right now, it's being done in Canada. Uh they're re uh uh restructuring their their air network uh and and the and and the really goal is to is to to build profitable density. And the problem is that they've you know, they've generated a lot of cost savings, but some of that cost savings has gotten lost because the macro just isn't as strong as maybe they thought it's going to be. And looking forward, I think it's very difficult for FedEx or really anyone that deals with the economy to kind of forecast where they think volumes are going to go, because we really don't know. There's so much uncertainty. As you mentioned earlier, whether it's you know, the risk from tariffs, whether it's the inflationary risk that could come from tariff, whether it's getting rid of the dominimus exemptions for low valued freight out of China. There's a lot of things that could weigh on results, at least looking into the near future.

Hey, Paul, I think it's a lot has to do with the fact that the macros is a little weaker than they thought. And you know, the weakness that they were seeing is in the business to business biomes as well as the industrial economy. You know, they have a lot of exposure to the industrial economy, and their FedEx free business just are less than truckload business. Uh. That business kind of disappointed on the earnings while it's a parcel business express business. Uh, slightly bet expectations. You know, the company is going through a major transformation. It's been operated as a uh kind of bloated concern for a number of years. Uh. I know, over the last couple of years, they've been taking proactive steps into kind of writing that and reducing costs. They're also you know, doing things that that that management thought was kind of taboo, if you will. They're now uh uh combining their ground and express networks in certain regions, and they're gonna, you know, eventually do that in the United States. Right now, it's being done in Canada. Uh they're re uh uh restructuring their their air network uh and and the and and the really goal is to is to to build profitable density. And the problem is that they've you know, they've generated a lot of cost savings, but some of that cost savings has gotten lost because the macro just isn't as strong as maybe they thought it's going to be. And looking forward, I think it's very difficult for FedEx or really anyone that deals with the economy to kind of forecast where they think volumes are going to go, because we really don't know. There's so much uncertainty. As you mentioned earlier, whether it's you know, the risk from tariffs, whether it's the inflationary risk that could come from tariff, whether it's getting rid of the dominimus exemptions for low valued freight out of China. There's a lot of things that could weigh on results, at least looking into the near future.

For companies like these, what winds up being their base case when it comes to tariffs and trade, Like, they've got to do something, they got to say something. So what's their base case?

For companies like these, what winds up being their base case when it comes to tariffs and trade, Like, they've got to do something, they got to say something. So what's their base case?

I don't really know if they have a base case. The base case is that we're going to operate in the in the environment that is given to us, and it's not going to be special to us because you know, our major competitor or EUPS is going to have to deal with a similar situation. And so I think they just want to know what the rules of the road are so then they can kind of operate, you know. As you know, a lot of companies are holding back on CAPEX because they just don't know, you know, are we going to is investing in Mexico a good thing or a bad thing for US manufacturers? It just there's really a lot of things that are up in the air.

I don't really know if they have a base case. The base case is that we're going to operate in the in the environment that is given to us, and it's not going to be special to us because you know, our major competitor or EUPS is going to have to deal with a similar situation. And so I think they just want to know what the rules of the road are so then they can kind of operate, you know. As you know, a lot of companies are holding back on CAPEX because they just don't know, you know, are we going to is investing in Mexico a good thing or a bad thing for US manufacturers? It just there's really a lot of things that are up in the air.

Yeah, it's interesting. I'm looking at the kind of the earnings estaments out there LYE on the Bloomberg terminal, and you know, the streets kind of got fifteen percent earnings growth starting in their fiscal twenty six year. They're may twenty six year. Over the next couple of years, there's stock trades are like eleven, i know, twelve times multiple earnings multiple. That looks pretty attractive, But I guess you have to buy off on management's ability to execute, right.

Yeah, it's interesting. I'm looking at the kind of the earnings estaments out there LYE on the Bloomberg terminal, and you know, the streets kind of got fifteen percent earnings growth starting in their fiscal twenty six year. They're may twenty six year. Over the next couple of years, there's stock trades are like eleven, i know, twelve times multiple earnings multiple. That looks pretty attractive, But I guess you have to buy off on management's ability to execute, right.

Yeah, we don't do buyhole sell here at Bloomberg Intelligence, as you know. But you know, at the end of the day, the thing that they are doing today, when the demand environment will be is less volatile and more predictable, will be very good for margins. It's just like, you know, how long are you willing to wait for that to happen? You know, is it going to be four years until things normalized or is it going to be in six months when things normalize. We just really don't know. And there's a lot of other things that can happen as well. You know, the Trump administration has talked about, you know, adding fees and fines to you know, ships that are not made in the US that come to dock in the US that could have an impact on air freight, could move stuff to air freight because it becomes I guess more reasonable for certain items. So there's a lot of different things that can happen. We just don't know. As I mentioned earlier, with the rules of the road are which are critical for us to figure out where things are headed from here because you know, GDP expectations have been moderating as you know, and these companies FedEx and ups are tied to that.

Yeah, we don't do buyhole sell here at Bloomberg Intelligence, as you know. But you know, at the end of the day, the thing that they are doing today, when the demand environment will be is less volatile and more predictable, will be very good for margins. It's just like, you know, how long are you willing to wait for that to happen? You know, is it going to be four years until things normalized or is it going to be in six months when things normalize. We just really don't know. And there's a lot of other things that can happen as well. You know, the Trump administration has talked about, you know, adding fees and fines to you know, ships that are not made in the US that come to dock in the US that could have an impact on air freight, could move stuff to air freight because it becomes I guess more reasonable for certain items. So there's a lot of different things that can happen. We just don't know. As I mentioned earlier, with the rules of the road are which are critical for us to figure out where things are headed from here because you know, GDP expectations have been moderating as you know, and these companies FedEx and ups are tied to that.

Hayley, we really appreciate it ly classic Albumb're intelligence and your transport logistics and shipping analysts.

Hayley, we really appreciate it ly classic Albumb're intelligence and your transport logistics and shipping analysts.

You're listening to the Bloomberg Intelligence podcast just live weekdays at ten am Eastern on Apple, Colarcklay and Android Auto with the Blueberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

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Remember when we were all going to get this rate cutting cycle and it was going to be really great for commercial real estate and everything was going to level out and stabilize, Well, that seems to be definitely put on pause. Add in the economic uncertainty and it raises a lot of questions as to what happens to that sector. Hassan naj is a CEO of Marcus Millichap. They are a commercial real estate firm. They're based in California. But he's here in the studio. A lot of economic uncertainty and the fed on pause. What does that mean for Cire, Good.

Remember when we were all going to get this rate cutting cycle and it was going to be really great for commercial real estate and everything was going to level out and stabilize, Well, that seems to be definitely put on pause. Add in the economic uncertainty and it raises a lot of questions as to what happens to that sector. Hassan naj is a CEO of Marcus Millichap. They are a commercial real estate firm. They're based in California. But he's here in the studio. A lot of economic uncertainty and the fed on pause. What does that mean for Cire, Good.

Morning, great to be with you, thanks for having me back. It means the fundamentals are very well intact. It means the enthusiasm that we saw post election because of the election outcome being favorable to economic growth and especially real estate tax treatment with the twenty seventeen tax reduction and Jobs Act, more likely to be extended still, but you're absolutely right. In the near term, we've seen a lot of our clients just pause for a minute to see what happens with tariffs, to see what happens with the economy. The slowdown is now beginning to sound more like a potential recession, although the data doesn't quite support that just yet. But there is more near term concern once the dust settles with all of these kind of a week to week disruptions and the headlines and so on, I think those positive fundamentals and the essential enthusiasm that our clients feel will come back into the marketplace.

Morning, great to be with you, thanks for having me back. It means the fundamentals are very well intact. It means the enthusiasm that we saw post election because of the election outcome being favorable to economic growth and especially real estate tax treatment with the twenty seventeen tax reduction and Jobs Act, more likely to be extended still, but you're absolutely right. In the near term, we've seen a lot of our clients just pause for a minute to see what happens with tariffs, to see what happens with the economy. The slowdown is now beginning to sound more like a potential recession, although the data doesn't quite support that just yet. But there is more near term concern once the dust settles with all of these kind of a week to week disruptions and the headlines and so on, I think those positive fundamentals and the essential enthusiasm that our clients feel will come back into the marketplace.

I thought the lending market for commercial real estate today, if I wanted to go build a multi apartment building in Middletown, America, will my local bank lend to me or do I have to go to alternative sources?

I thought the lending market for commercial real estate today, if I wanted to go build a multi apartment building in Middletown, America, will my local bank lend to me or do I have to go to alternative sources?

Well, it depends very much by the project. So if we're talking about construction financing, that was the that is the most difficult to get right now because there is so much more more cautioned by lenders than we've seen in normal times. However, on the flip side of it, there's way too much worry about distress sales and distress becoming contagion and banks having to mark down on lots of portfolios. Have not seen it, haven't seen it because of the fundamentals being healthy and lenders not being motivated by marking to market and dumping a bunch of product at a big discount. And you have to remember, commercial real estate is vast. It's not just office space, it's retail, it's apartments, it's self storage units.

Well, it depends very much by the project. So if we're talking about construction financing, that was the that is the most difficult to get right now because there is so much more more cautioned by lenders than we've seen in normal times. However, on the flip side of it, there's way too much worry about distress sales and distress becoming contagion and banks having to mark down on lots of portfolios. Have not seen it, haven't seen it because of the fundamentals being healthy and lenders not being motivated by marking to market and dumping a bunch of product at a big discount. And you have to remember, commercial real estate is vast. It's not just office space, it's retail, it's apartments, it's self storage units.

Well, well, let's talk about the apartment part because in terms of building new supply, talk about uncertainty. It's a labor issue. It's a lumber issue, it's a steal issue, it's a supply issue. I mean, that is material risk for that sector, very much so.

Well, well, let's talk about the apartment part because in terms of building new supply, talk about uncertainty. It's a labor issue. It's a lumber issue, it's a steal issue, it's a supply issue. I mean, that is material risk for that sector, very much so.

But any more constraint on new development is actually positive for the industry because we've been building a lot of apartments over the last few years. Before all of this tariff talk. We saw a fifty to seventy percent decline in permits and new construction starts in the last let's say six months or so, which is very positive for the industry because there was some overbuilding going on in about five or six metros. On the office front, I have to say, especially here in New York, most of your audience probably is unaware that the office market is actually coming back a lot faster than people would have expected. Just here in New York, the second half of twenty twenty four showed the most absorption of office space we've seen since the pandemic recovery. Actually, about eight million square feet between downtown and Midtown Manhattan were absorbed in the second half of twenty twenty four. Vacancies came down more than a full percentage point because companies are making such a push to bring people back and the economy still expanding.

But any more constraint on new development is actually positive for the industry because we've been building a lot of apartments over the last few years. Before all of this tariff talk. We saw a fifty to seventy percent decline in permits and new construction starts in the last let's say six months or so, which is very positive for the industry because there was some overbuilding going on in about five or six metros. On the office front, I have to say, especially here in New York, most of your audience probably is unaware that the office market is actually coming back a lot faster than people would have expected. Just here in New York, the second half of twenty twenty four showed the most absorption of office space we've seen since the pandemic recovery. Actually, about eight million square feet between downtown and Midtown Manhattan were absorbed in the second half of twenty twenty four. Vacancies came down more than a full percentage point because companies are making such a push to bring people back and the economy still expanding.

Have we seen any real distress sales in New York or Boston or San Francisco a building that we'd all know and oh boy, it just sold it fifty cents on the dollar. I haven't seen too many of those stories.

Have we seen any real distress sales in New York or Boston or San Francisco a building that we'd all know and oh boy, it just sold it fifty cents on the dollar. I haven't seen too many of those stories.

Just to point out, he really want to see these stories.

Just to point out, he really want to see these stories.

I want to see these stories.

I want to see these stories.

You've asked me about that before bottom of the market. Sure there have been, but it's limited to obsolete, older office space, usually in urban markets, that cannot be reused. Anything that has a chance of retenanting being renovated is not in the category of bargain basement pricing. It's only the true obsolete office product that we've seen some older shopping centers too, but not I get.

You've asked me about that before bottom of the market. Sure there have been, but it's limited to obsolete, older office space, usually in urban markets, that cannot be reused. Anything that has a chance of retenanting being renovated is not in the category of bargain basement pricing. It's only the true obsolete office product that we've seen some older shopping centers too, but not I get.

Pitched by Frans. My real estate friends got a new fund. We're going out. We think we're close to the bottom. I'm like, I'm not giving you anything because I'm not sure where we are. I haven't seen that story that's going to mark the bottom.

Pitched by Frans. My real estate friends got a new fund. We're going out. We think we're close to the bottom. I'm like, I'm not giving you anything because I'm not sure where we are. I haven't seen that story that's going to mark the bottom.

Well, that's the thing is that we always wait for it. I know says it's a good opportunity, and then all of a sudden, it's never seems to materializers that one off that we didn't.

Well, that's the thing is that we always wait for it. I know says it's a good opportunity, and then all of a sudden, it's never seems to materializers that one off that we didn't.

I'll have to tell you opportunity funds that have been formed in the last two three years in anticipation of this big buying opportunity have been very frustrated. So there's situational distress, but there is no systemic.

I'll have to tell you opportunity funds that have been formed in the last two three years in anticipation of this big buying opportunity have been very frustrated. So there's situational distress, but there is no systemic.

Distress death buyers. From twenty sixteen, it had those funds ready to go for the turn and get Nope, where's that distressed debt turn? Regionally, what do you guys like right now?

Distress death buyers. From twenty sixteen, it had those funds ready to go for the turn and get Nope, where's that distressed debt turn? Regionally, what do you guys like right now?

Well, the growth markets such as Texas, Arizona, Florida, Georgia. I was just in Atlanta yesterday. We had a presentation to about four hundred of our clients in that market. Those continued to lead in demographics and job creation. I think California is getting a bad rap and it's a diamond in the rough. A lot of those real estate prices have adjusted to the point where if you look at the replacement cost, it makes this window off time a very attractive one to get into commercial real estate if you can stomach the near term, you know, oncertainty around interest rates and so on. And we're seeing a record capital on the sideline wanting to get back in. There is a bit ask spread still in the marketplace, but it's narrowing.

Well, the growth markets such as Texas, Arizona, Florida, Georgia. I was just in Atlanta yesterday. We had a presentation to about four hundred of our clients in that market. Those continued to lead in demographics and job creation. I think California is getting a bad rap and it's a diamond in the rough. A lot of those real estate prices have adjusted to the point where if you look at the replacement cost, it makes this window off time a very attractive one to get into commercial real estate if you can stomach the near term, you know, oncertainty around interest rates and so on. And we're seeing a record capital on the sideline wanting to get back in. There is a bit ask spread still in the marketplace, but it's narrowing.

Yesan, thank you so much for joining us. We always appreciate getting some of your time. I saw Naji, CEO of Marcus and Milichep joining us here in our Bloomberg in Directive Broker studio. He was like talking about commercial real estate, and again, as I mentioned before, it's not what I used to think. I used to think it's just one big, monolithic marcial real estate, but so many subsectors. Some are doing better than others here. But you know, I have seen a couple of stories about San Francisco, LA. Some big market buildings do change hands at a big discount, but interesting.

Yesan, thank you so much for joining us. We always appreciate getting some of your time. I saw Naji, CEO of Marcus and Milichep joining us here in our Bloomberg in Directive Broker studio. He was like talking about commercial real estate, and again, as I mentioned before, it's not what I used to think. I used to think it's just one big, monolithic marcial real estate, but so many subsectors. Some are doing better than others here. But you know, I have seen a couple of stories about San Francisco, LA. Some big market buildings do change hands at a big discount, but interesting.

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal