Mark Bonner: 00:09

Okay. Welcome to First Draft Live. It's Friday, September 19. I'm Mark Bonner, business owner and chief coming to you live from New York. Thank you to so many of you for tuning in from across the country and overseas.

Mark Bonner: 00:22

You know, every week, thousands of you drop in here and on this podcast to watch us wrestle with the chaos that is commercial real estate. But here's the part you might not know. First Draft Live is actually the spin off. The main show? That's our daily newsletter, the first draft.

Mark Bonner: 00:39

If you're not reading it yet, you're catching the trailer after the movie's over. For about 50¢ a day, you get the stuff no one else gets, and you get it first. That's the whispers before the headlines, the charts before the press release, the context before the spins. Scoops exclusive and deep analysis written by me and a handful of our nerdiest newsroom nerds who live and breathe the industry in the very wee hours while you're still smashing the the snooze button. And yes, you can test drive it today free for seven days.

Mark Bonner: 01:17

So go on. Head to biznow.com/firstdraft. That's biznow.com/firstdraft. Okay. Now let's get to today's story.

Mark Bonner: 01:27

The Fed finally pulled the trigger. A quarter point cut, the first since 2024. It was enough to spark the headlines, but I don't think it's enough to shift the math. Yes, volumes are stirring nearly $110,000,000,000 in trades last quarter, but vacancies are climbing across the board. Industrial is at an eleven year high.

Mark Bonner: 01:48

Retail is inching higher. Multifamily rent growth is fading. And office, still the gravitational drag. $70,000,000,000 in debt is already wobbling. Prices are down more than 50% from peak.

Mark Bonner: 02:04

Cap rates are drifting higher with only the faintest signs of leveling off. Even the sector once thought to be untouchable. Data centers is beginning to show cracks. New AI campuses are attracting billions, but legacy stock is bleeding CapEx and slipping in value. Here's the real tell.

Mark Bonner: 02:24

The Fed changes the conversation this week, not the fundamentals. It gives CEOs a story for their boards, GPs for their LPs, lenders for their committees. Momentum is back. At least that's some of what's in my inbox this week from PR shops trying to take back control of the prevailing narrative. But as we've been reminded this week, the Fed doesn't control the long end of the curve.

Mark Bonner: 02:51

A tweak in rates may buy time, but workouts, write downs, and income growth will decide who survives. That's where we are. Relief without rescue, at least for now, or so I think. And that's why we've got Jim Costello here today, executive director of MSCI Research, to cut through the noise and show us what this moment really represents. Send your questions in the chat.

Mark Bonner: 03:17

We'll get to as many as we can. Jim, welcome to First Draft Live.

Jim Costello: 03:21

Thanks for thanks for having me here.

Mark Bonner: 03:24

Jim, make sense of it all. What is your big takeaway here for what happened and perhaps what has not happened based on Jerome Powell's decision this week to drop basis points by 25?

Jim Costello: 03:36

Yeah, it's there was a lot of optimism in the industry around the potentials for a cut in the fund spread rate. The hope being that you cut this and it's a signal to the market and it helps reduce the borrowing cost for other items. It helps reduce the cost of capital, reducing the tenure treasury, eventually reducing mortgage rates. But that's not what happened. The Fed, again, it only controls the short end of the yield curve.

Jim Costello: 04:07

The long end is the market and the market saw a 25 basis point cut and just didn't react how people were hoping instead of a decrease in rates. The ten year Treasury went up about 10 basis points and that there's a weekly survey of residential mortgage rates I look at, but a daily one, showed about a nine basis point increase. Now that's residential, it's not commercial, but they're kind of linked. They rhyme over time. And with that kind of momentum there, if it's sustained, it's saying that all the hopes that people were pinning on Fed rate cuts, just aren't being realized.

Mark Bonner: 04:51

I mean, that sounds like a little bit like a bummer, Jim. Mean, hearing in my inbox this week, I'm seeing CRE celebrating a lifeline. Right, and look anytime you get a cut like this, especially in a market over the last eighteen to twenty four months where commercial real estate has been asking and begging for interest rate reductions. Why are they celebrating? I mean, they fooling themselves while fundamentals deteriorate in your opinion?

Jim Costello: 05:19

It's not fooling themselves with deteriorating fundamentals. In fact, there's sectors I think that fundamentals are not that bad, but it's more that there was a lot of optimism. There's a lot of hope that it would both be a bigger cut and it would have more of an impact. And in both cases turned out differently. You know the impact, the markets in terms of what investors are willing to do on that credit side.

Jim Costello: 05:51

They're just not following that signal that they that the hope was folks would follow. So you have that one issue, but then on the fundamental side, yeah, there's some strains showing in the market, but some of them are lagged strains. It's not as much because of the current conditions. The industrial sector, for instance, we had two years of record high industrial construction. So sure, availability rates are at levels not seen for a decade.

Jim Costello: 06:24

It's not necessarily a sign of just weakness in the economy. There, I think it's really a supply driven issue. Maybe some apartment markets are driven by the same issue. Some of the markets in the South, folks were really tied up in this whole boosterism of people are going to leave New York and move to Atlanta. And sure, there were some moves in COVID, but it didn't continue forever.

Jim Costello: 06:46

That's one aspect of commercial real estate that I think people are often really bad about. They see a trend and they just extrapolate it in a linear sense into the future. You don't have once once the low cost advantages in housing for places like Florida started to go away, it changed the narrative on migration where it's kind of back to pre pandemic trends and growth. Still good growth, still good reasons to be in some of these markets in the South. But the momentum that had been there is slowing, which is not necessarily because of anything current in the economy and any current challenges.

Jim Costello: 07:25

It's a little bit of lagging impact. Any current challenges from the discussion about a weak labor market, think are yet to be realized.

Mark Bonner: 07:34

So what's next, Jim? I mean, beyond your sharpest insight of what this actually means from earlier this week, what's next? What is the next hurdle that you think real estate needs to clear on this front in order for it to get on a path where it can truly begin to recover from five or six years from the pandemic, you know, altering society at large and also capital markets, but also the current policy that we're in in America in particular.

Jim Costello: 08:06

Yeah, what's next? We're taking a look at the loan maturities that are upcoming. We're trying to produce a report next week looking at just that and how many of the loans are going to be above water and how many are below water. And the challenge on that is that there's a lot of loans out there where, you know, they'll need capital. They'll need to refinance at some point.

Jim Costello: 08:31

And that's why folks are so optimistic about rate cuts, thinking that if it translates through to lower commercial mortgage rates, then maybe the high LTV loan I did at 2022 in January at a record low coupon, maybe I'll be able to survive that. But if rates don't drop, if they stay high or even follow the residential and maybe go up a little bit, some of that stuff is gonna have a more difficult time refinancing. And so what would happen next is, is, you know, some folks taking a bit of a loss as lenders end up taking properties. Now, not everything. It's not gonna be a total collapse.

Jim Costello: 09:11

In fact, like distressed asset sales really haven't spiked much in this cycle. Three years after the start of the financial crisis, distressed asset sales and commercial real estate hit 20% of all transaction activity. We're now just about three years on from the increase in interest rates that really kind of is driving the change in mentality in the market. And now we're up to 3% of the market as distressed asset sales. So the total impact, even though it had some big price declines, the total impact is not as intense yet.

Jim Costello: 09:45

Some of it is due to different types of lenders, the financial crisis, so many loans that went bad were CMBS version one point zero and you didn't have much wiggle room with the special servicers then. Now you had different types of lenders, particularly private credit world. That's been a big source of growth. For like the first mortgage position, a report next week is going show like about 15% of the markets this year has been the private credit space. I think part of it is, and I'm still trying to make a case for that and build a data center, but I think some of it is that the distressed opportunity that happened last cycle, private credit has stepped in in a way that nobody else could following the financial crisis.

Jim Costello: 10:31

And there, you know, a lot of mezz stuff. And so maybe then properties trade hands and end up in the hands of some of these mezz funds.

Mark Bonner: 10:39

But just one more note on the on the decision on Wednesday. I mean, it was 25 basis points. A lot of people were screaming that it should have been 50 certainly from the White House. You know, I mean, I I think the president would have liked to have seen it be a 100 cut. That's neither here nor there.

Mark Bonner: 10:54

What is here is that Jerome Powell, sort of insinuated in a lot of economists backing up that we're gonna probably see 70 basis point reduction between now and the end of the year, possibly further cuts going into twenty twenty six. Let's assume for a second that that comes to pass, Jim. Like, what will that mean? Will that be more meaningful once we get into January and February 2026? Does that change the math for you as you look at the landscape?

Jim Costello: 11:20

The the thing that I'm concerned about is the underlying trend in inflation. If if you're making cuts and we're in a low inflation environment and you don't have any momentum kind of going the other direction. I wouldn't be concerned, think it would have the impact that folks want of the market looking at that as a signal, but you know we do have the situation of a weak labor market combined with. Inflation, it's not at a high level, but the momentum is now moving in the other direction. And if I'm looking at that, I'm going to be a little bit concerned about getting into instruments that are just giving me a fixed payment that doesn't take into account anything with the inflation.

Jim Costello: 12:09

So buying bonds might be problematic. Now, can't do it in an easily leveraged basis with a lot of real estate given the cost of capital in that environment if the rates are going up. But in real estate, if you're worried about a little bit of unexpected inflation, that could be a benefit for the sector as people try and lock in CPI adjusted income streams. So, you know, there's a lot of nuance on this. There's some things that are bad, but then other impacts that can be beneficial.

Jim Costello: 12:48

But it's certainly easier for everybody when you have high growth and a low cost of capital. But right now we're facing a challenge of, you know, still challenges on growth and the cost of capital is, you know, and you know, it's kind of funny. There's folks looking at the cost of capital today and looking at where rates are and thinking, oh, it's still expensive because their mentality has been shaped by everything we've gone through since, I mean, really over the last fifteen years, we've been in a weird environment of excessively low cost of capital because of all the QE and all the response from the global financial crisis and the long scope of things right now, ten year treasury this morning when we looked at us at 4.1, you know, in the long scope of things for commercial real estate, that's a low interest rate environment.

Mark Bonner: 13:41

It's just All right. And I'm glad you brought this up Jim, because you need, you got an entire in, you got an entire generation of commercial real estate players that have known that period of time that you referenced, which was by the way the longest expansion of The US economy in history near zero rates for a very, very long time. Double, maybe even triple the length of the typical cycle for something like that. Pandemic happens, we're here where we are today. I mean, that a large group of people that have a lot of power in this industry that were doing business one way and now see this and you're right to bring up the macro, the history of this.

Mark Bonner: 14:18

Like, how would how does that resolve itself, Jim? Because I I still have people in my inbox and on my other than my phone where I'm talking to people saying, this is ridiculous. This is way too high. And I'm with you. I'm looking at the longer twenty or thirty year history here and I'm thinking, I don't know what, how do you square that Jim?

Jim Costello: 14:38

Well, we need a generational change is happening for commercial real estate in line with some of these secular shifts in the market. If you go back to the mid 1980s, you and were investing in real estate from then to around 2019, you always had capital market forces at your back when you're making an investment. You had, the ten year treasury on a general downward trend over the whole period. And so generally mortgage rates and cap rates, I mean, they're not gonna move one to one, but they'll rhyme. But the issue is that if I, average commercial property investments are held for about seven years in The United States.

Jim Costello: 15:23

So anytime from the mid 1980s to 2019, when you're buying something, were buying it from someone who seven years previously likely went in at a higher mortgage rate and a higher cap rate. And so you could mismanage an asset. You have the wrong leasing team in place, spend too much on CapEx and still eke out a positive return just from the capital market shift. That game, let's say magically the ten year treasury stays at this 4.1% level here for the next ten years, never moves. That's a very unlikely scenario.

Jim Costello: 15:59

I'll say that, but let's say that happens. If that does happen, it's still not going to, capital market forces are not going to be a tailwind anymore. There'll be a headwind because everything that was bought and sold from that period when the ten year treasury was unusually low relative to history with all the QE that was happening, all those deals are gonna face challenges when it's time for disposition and a fund, time for the new loan to come due and refinance. Capital market forces are going to be a headwind. So what this means is if you want to be successful in commercial real estate, it's not about that home run of capital market forces, just lifting the value tremendously.

Jim Costello: 16:51

It's going be a lot of singles and doubles now. So just bringing it back to Sportsview, helping you with your Mets. But the singles and doubles, those are gonna be proper leasing, getting the right broker in place that gets tenants into your property, doing a proper risk analysis of the tenant who's coming in to make sure that they're actually gonna pay, making sure that your CapEx spend is in line with market averages and that your OpEx is also in line with market averages. You're not too far out of line from what your competitors are doing. That's going to be the recipe for success.

Jim Costello: 17:31

And it's not going to have the same oomph as what you had when tenure, when the tenure treasury went from a 20% rate to a single digits.

Mark Bonner: 17:43

You mentioned my Mets, they're going need a lot more than singles and doubles, Jim. If you're just joining us, this is First Draft Live. We're unpacking the post cut reality with Jim Costello, executive director at MSCI Research. Send your questions, and we'll get as many as we can. Jim, let's talk about price discovery.

Mark Bonner: 18:01

Office distresses balloon past 70,000,000,000. Cheap debt may unlock deals, but at what cost? Fire sales risk rewriting the comps across entire markets. In your opinion, are we witnessing genuine price discovery right now? Or do you think this is capitulation in disguise?

Jim Costello: 18:20

Well, no, capitulation is price discovery. The issue was that current owners of buildings, nobody wants to take a loss, right? And just people are risk averse for everything and nobody ever wants to lose something. And you had many investors who held these assets. You had a big shift in the way people react to and use office space And nobody wanted to realize that loss until they're forced to.

Jim Costello: 18:47

And so you had current owners delaying delaying delaying and just not realizing a loss until there was some outside event that made them. And one year in, two years in, you're not going to do anything. And so deal volume was low. So you had buyers and sellers really fire part. But over time as some loans came due, some assets were transferred to somebody else, whether through a managed defaults or just some outright foreclosure activity, it sent signals to the market.

Jim Costello: 19:22

And we're five years in from the pandemic. The waltz that was in place pre pandemic is slowly burning off. So the message is getting out to current office owners and as a result, prices for like CBD offices are like down 52% from the peak and you get a 52% decline for some of these buildings that are still kind of stable and income. There's still people in the office. I'm in the office today, but I'm a real estate person.

Jim Costello: 19:52

So I eat my own cooking. Right. But, but even beyond our sector, there are still some other folks in the office because there's still some benefits of being around other people. There's a happenstance of, just pointing into other people you work with in the company and the cross, ideas that come with it. But there's some value there, it's just not the value that was in place.

Jim Costello: 20:13

And so the current owners are finally starting to come to grips with that as they see competing assets go through distress. It impacts their understanding of the value that they have in place. So yeah, there is capitulation. They're finally meeting the market and that's where we're starting to see deal volume climb again for It's not like Manhattan, we're up like 5% year over year last quarter. It's not, and some of it was distressed, but even if you strip out the distress, they're genuine assets that people are, are selling in a, in a, arm's length transaction at this point where they're reflecting on the fact that the distress shows that what was the value before has changed.

Mark Bonner: 20:53

Look, in a situation like this, there's always starving dogs and fat cats, right? And moving on to data centers, right? This has been a fat cat for commercial real estate for quite a while, but that fat cat is starting to not look so pretty anymore. Data centers are supposed to be bulletproof, right? But sales are down 50% year over year, even as AI ready ground ups explode.

Mark Bonner: 21:18

The bifurcation is widening, balance sheets are already starting to show some bruises. Is CRE's crown jewel at risk of becoming its next bubble?

Jim Costello: 21:29

I never would have categorized data centers as a crown jewel, But I think one of the issues

Mark Bonner: 21:36

I mean, it's got a lot of momentum, Jim. I mean, it's something that the industry has been really proud of and they've ridden the trajectory of it for quite a while. So, I mean, you know, semantics, but, you know

Jim Costello: 21:45

It has momentum, but it's I think the issue there is that is how institutional investors create portfolios. Like every meeting I've had with asset owners and asset managers over the last year has been there's the focus of discussion is what big major sector bets should we make. Any investor who over allocated to industrial from around 2015 on, they beat everybody else in our ACOE index. That's the all core open end index we create from all the appraisals of the institutional managers when they give them to us. So they know that the folks who won, they won by making a big sector bet on industrial.

Jim Costello: 22:30

There's still some good things about industrial, but some of that game has played out. So now people are thinking what's the next big sector bet I can make that will help me to outperform. And with some transformation going on with data centers and the digital economy and the AI stuff, people looking at it and thinking, maybe this is a big sector bet I can make that will help me boost my performance. But there's some problems with that. I mean, I still think there's great reasons to be in data centers and there's some great properties out there, but, not every, but not every property is the same.

Jim Costello: 23:10

You know, in line with that comment earlier about it's singles and doubles are going to make you win. Think about that from the property perspective as well. There are data centers that are older, don't have the right power supply, don't have as good of access to water for cooling needs, don't have the right capacity for more modern applications. So if I'm so hungry to get into the sector that I'm looking at anything, you know, why is that current owner selling it in this environment? So I think there's, you gotta be careful that you're not buying into the expansion by buying the obsolete assets.

Jim Costello: 23:53

So there's a challenge in that. The other issue I'd focus on there, if, I've been looking at the life sciences sector as a proxy for what we might see with data centers. A couple of years back, that same optimism was in place for life sciences. And to me, was clear at the time that something was going to change because I took a look at MSCI, the public markets, there's a ton of data and information on that side. We have an ETF tied to that we create the numbers for, tied to the life sciences companies.

Jim Costello: 24:29

And if you look at the ETF for the life sciences index and the performance there versus the ACWI, the ACWI is our, on the public equity side, the, the just it's, it's the everything index. It's like, it's like the S and P 500 or but if you look at the life sciences index versus the ACWI, life sciences was tremendously outperforming ACWI for a bit. And what does that mean? That means these life sciences firms, the market was saying these life sciences companies are more valuable. So they invested in their own companies.

Jim Costello: 24:59

And when you invest in your own company, that means more plant and equipment means more real estate demand. And then that performance slipped below Acree and about nine months later, nobody wanted to be in life sciences anymore because it So takes a bit for that spending cycle to I'd be careful looking at data centers to make sure I'm in the right physical kind of locations. I think that part in a world where the singles and doubles are just getting the fundamentals of property management right are going be the driver of success. That's what I want to be in to make sure that my data center strategy is focused right. But then I also look at that macro concern of just how do the various tech firm indexes that we produce compared to the ACWI.

Jim Costello: 25:44

And if they start underperforming, then suddenly these firms aren't going to have as much to spend on occupying data centers. So when that happens, they'll still spend, but they'll only be in the right properties. And so that will create winners and losers in that data center world.

Mark Bonner: 26:01

You know, I'm a student of boomerang economics and you and I spoke earlier this week for the first draft newsletter that I was talking about top of the show. Cuts are meant to heal, but they are also a signal of weakness. Jim, if inflation reignites, the Fed might be forced into a whiplash tightening cycle just as operators re leverage. Do you think Powell is bailing out CRE or perhaps setting it up for an even harder crash down the line?

Jim Costello: 26:27

Well, I don't think they're trying to bail out CRE. So as much as everybody who's listening might hope that honestly, the central banks typically, they have long memories to a lot of these central bankers. Real estate is still stuck in the 1980s. Oh, they caused all these recessions for us. And there is also a recognition, well, real estate made a lot of money in, the last couple of decades.

Jim Costello: 26:54

So we don't have to reward those people now. So I don't think that they're trying to act to protect us. They're trying to act

Mark Bonner: 26:59

Well, I mean, in defense of commercial real estate, you know this better than I do. This is a massive part of the American economy, trillions and trillions of dollars. For anyone in the general public can understand the power of this industry. They definitely understood it in the middle of the pandemic when they couldn't go to the office or go to a ball game or go to the store, right? And we saw the economic impact of that trend downward just broadly, right?

Mark Bonner: 27:22

But I mean, you know, forgive the phrase but I mean, this question still remains, Are we setting ourselves up for a harder crash down the road given given everything else that you already talked about, in terms of other economic indicators?

Jim Costello: 27:37

I am worried about the chance for stagflation where we have weak labor markets, potentially slowing growth and higher inflation. If we do hit that kind of situation, that's a difficult environment for any central banker to be operating in. And that's, that's a fear. If you go back to the last period of time when we had that kind of activity in The United States, The real problem is just not a lot of good data on performance of real estate back then. The notion of real estate was different then than today.

Jim Costello: 28:14

Today it's an investment and you gauge the performance relative to other investments in your portfolio and other asset classes. Back then, there was hardly any good information out there. And so it's just hard to see how it performed. So if, if you can catch them, what you wanna do is just sit down with coffee with, you know, some of the senior execs from your firm who were around back then who are retired now and just, visit with them and catch up and ask them for stories about when they were junior analysts in the seventies when we dealt with, stagflation because that's, that institutional memory is really all we can go about because we don't have data.

Mark Bonner: 28:57

I'm going to get to one question from the audience. Jim, can you talk more to the weakness you were seeing in retail?

Jim Costello: 29:05

Well, it's funny retail. I'm actually kind of optimistic about retail, retail. I mean vacancy, looking at some data from CBRE, their quarterly retail trends on availability. It's been kind of flat recently for the performing assets. There's been a growth in kind of older obsolete assets that are contributing to vacancy, but the survivors are, you know, kind of flat on vacancy.

Jim Costello: 29:38

It's not so bad. The issue with retail, we got into this period of just, you know, uncertainty in 2020 and, you know, folks weren't sure what would happen next to consumer spending and everything, but the market has slowly been removing older obsolete properties. And so that has helped the existing properties, to improve the bottom line, NOI per square foot, all the institutional stuff that goes into our ACOE index, NOI per square foot is now above where they were, before the pandemic. And large part because of, you know, the removals, but you know, and also, you know, this notion that people had that, oh, everything's moved online. There's no more need for retail.

Jim Costello: 30:32

That just doesn't fit yet. The more spending still happens in store than online and online spending, it's still growing, but it's growing at a slower pace than the past. And it's slowly starting to converge with in store sales because at some point there's only so much more you can sell online.

Mark Bonner: 30:52

Sure. Let's go over one more question from the audience. Since real estate is a physical asset, when will climate change risk finally swing a bigger bet? Isn't that big OpEx exposure?

Jim Costello: 31:06

Yeah, it's, the climate risk is, well, that's a good way to put it. That's CapEx exposure though for folks that they have to spend more on risk mitigation in different areas. And it's a tricky one because there's a lot of views on, in politics that kind of cloud the investment decision. The way I just frame it for folks is just think about the physical risk aspects of it. If I'm, if I'm making a loan on a warehouse property that's in a low water zone, rather, it's close to sea level in Florida, you know, I gotta be careful about the fact that there might be a, an event as opposed to, something that's more inland and up, up from, up from the waterfront.

Jim Costello: 32:00

That's a, that's a safer bet, for myself personally. I bought a house in Florida. I still live in New York, but you know, it's the winter kind of place. And I actually looked at our climate risk tools first for my own decision about the location so that I made sure I was on the high ground because that storm surge is the biggest risk for value. That's where the most damage comes from.

Jim Costello: 32:28

And so it just how you price that risk of those locations and what kind of mitigation stuff you put in there, that's, that's an important thing.

Mark Bonner: 32:39

Jim, I know we're running a little long on time, I'm going to end on this last question. Everyone talks about dry powder. Liquidity, there's a little bit of optimism in the market right now, but no one wants to talk about structural cracks, stalled absorption, zombie offices, capital stacked on shaky marks. What's the real systemic risk that no one wants to admit on stage right now?

Jim Costello: 33:06

Systemic risk. Yeah, there's dry capital out there, rather dry powder out there. But think about dry powder. You get a little storm and the wind can blow it away. I mean, if you've, if you've ever shot with, with the old muzzle loaders, with the flintlock stuff, you know, that's why they went to caps as opposed to just pouring the powder in because the caps it's in place, but you know, wind pulls up and it sends everything out of your pan.

Jim Costello: 33:38

But in the same kind of context, in the middle of the financial crisis when it was starting, there were people optimistic, oh no, no, no. We have plenty of dry powder out there. The market's not going to collapse. But then when investors saw that, listen, you told me that you'd hit a 9% unlevered and there's no way you can do that in this market. Then they were able to, withdraw their capital from those funds.

Jim Costello: 34:01

So you saw people, you saw the dry powder drying up. And so that's the, that's the worry I've got about the dry powder. If you don't have a situation where managers can place the money effectively and hit the target IRR, so promising that dry powder will dissipate quickly.

Mark Bonner: 34:22

Okay. That's the, that's our show for today. Jim, thanks for being here.

Jim Costello: 34:26

Hey, thanks for having me. It's a, this went too quick. I, there's tons more we could have talked about.

Mark Bonner: 34:31

Get you on for a part two, man.

Jim Costello: 34:33

All right.

Mark Bonner: 34:33

But thank you very much. If you missed any part of this episode or want to catch earlier shows, every conversation is on your favorite podcast app. Just search First Live. We'll be back next Friday with another deep dive into where markets, policy, and commercial real estate collide. I'm Mark Bonner.

Mark Bonner: 34:51

This is First Draft Live. Have a great weekend, y'all.