← The TreppWire Podcast: A Commercial Real Estate Show
The TreppWire Podcast: A Commercial Real Estate Show
376. Inside Industrial Strategy, Alternative Assets & Private Credit with Clarion Partners’ Rick Schaupp
00:34:05
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Welcome to the Trepwire Podcast, the show where commercial real estate meets data and insights. This is a special guest podcast. I'm Hayley Keen with trep, a data modeling and analytics firm for the CMBS commercial real estate and CLO markets. I'm with Lonnie Hendry, chief product officer. Today we are joined by Richard Schoup, equity owner, managing director and head of private wealth distribution with Clarion Partners. Clarion Partners manages roughly $74 billion in assets and is the third largest industrial real estate manager in the U.S. rick has participated in the acquisition, asset management and development management of over $6 billion of real estate. Originally joined Clarion Partners in 2000 and began working in the real estate industry in 1995. In 2025, Rick was named a Top 25 Power Investor by Commercial observer and is a renowned leader in our industry. Rick. So Rick, we are so excited to have you on the show today. Thank you and welcome.
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Thanks Hayley, and thanks Lonnie. It's great to be here.
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So I know I gave your background there, but we want to hear it from you. Tell us all about yourself, your role at Clarion and how you ended up where you are today.
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Sure. I actually when I was little fell in love with architecture and so I was passionate about that and went to architecture school. So I received a five year architecture degree and at that point got really interested in new urbanism and urban design. And at that time, as you mentioned, 1995, I went to work for a firm called Cooper Robertson. They had designed Battery Park City and Celebration, if anyone's been down to Orlando. So really that kind of new town re urbanization was just beginning at that point. I did that for several years. I went to business school and then I actually joined Clarion after business school. So it's been a long career there. As you mentioned, I've worked in development management, asset management and then have been a portfolio manager for over a decade and then about five years ago began working on more of the private wealth space and have transitioned to products into that world. And Franklin Templeton is actually one of our partners and they're our distributing partners. So I work closely with that team to expand the access of private real estate to a broader group of folks. So it's pretty cool.
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Yeah, that's a great introduction. I think you're the second guest in a row now that has had some sort of lifelong passion towards real estate or buildings or architecture, urbanism. It's really great. We could do a whole segment on just planning and urbanism. And kind of the built environment. I think we've seen some really awesome transitions over the last 30 years or just how real estate is used. And obviously the one that's garnering the most headlines today is the data centers. You know, we were just at CREF C and it was interesting hearing multiple people on panels debate whether it's a pure real estate play, if it's a hybrid play, if it's an infrastructure play. So we can get into that maybe at some point through the podcast today. But very intriguing background. I mean, for those that don't know Clarion, I mean as Hayley mentioned in the intro, you guys are major players across the CRE landscape. So as we kind of dive in today, maybe just give me a five year look back or perspective like how have you guys managed through the pandemic where we are today? And then maybe just give me some prospects for what you see on the near horizon.
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Sure. So I mean fortunately as a firm we, and I think as Haley mentioned, we were focused on industrial and the industrial sector and we're one of the third largest owners. So I think we were well, very well positioned, kind of going into Covid from an overall firm and portfolio standpoint with that general overweighting and kind of therefore just mathematically underweighting to traditional office. So you know, the firm has been well positioned and our think portfolios generally within the firm have been well positioned given, given that focus. We also have really focused on alternatives. And so as that 40% of office has, has gone down to 15 in the overall private real estate benchmark, we've seen other, other investment types. So you know, storage, senior housing, industrial, outdoor storage, those sectors kind of come into the space and we've really focused on that as well. So and then as I mentioned and I focus on the private wealth space. So the other big seismic shift we see happening is while the institutional ownership continues to be a big focus, obviously for the firm and the industry as a whole, this transition of, of access and democrat and the private wealth space has been the other focus. So I think between the industrial sector, the alternatives and the private wealth shift, that's been a good thing for the firm to kind of rebalance given the challenge the industry has seen particularly in the office space. But overall, as interest rates increased, yeah.
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C
It'S got to feel pretty good knowing when Covid hit you guys were sitting in the industrial space as your primary property sector because it's been the darling post Covid, obviously. And I know we've heard some anecdotes about certain markets slowing down. And there's been a lot of development national. But I'm still very bullish on industrial long term. I mean, I think we've talked on our podcast ad nauseam about just last mile distribution and the shift to more E commerce. It just means more positive outcomes for industrial logistics. All of those things have really transformed. And we joke, industrial used to be the asset class that nobody wanted to go into out of college. And now it seems like a lot of the students that I teach, they love the idea of going into industrial real estate. It's really transformed its image in the marketplace.
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Well, in 2000 when I started, right, you'd go to a warehouse and I mean there were literally some boxes around. Right. It was always kind of a mess. And, and then, you know, recently, now obviously the, the global, it's part of a global technological wonder. And now we have fully automated robotic facilities. Right. Where there's basically robots doing all the work. So it is fascinating how it went from, you know, just people throwing boxes around to, to part of a global chain to now actually a fully automated robotic system. And you know, even drones are starting to get involved in everything else. Right. So it is fascinating how it's, how it's completely, completely changed.
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Yeah. You know, I think the next evolution will be just this incorporation of AI within that logistics and autonomy. And we're starting to see that now with Walmart and Amazon and others. You know, you mentioned the drones, but it's not just drones. I mean, basically every component of what they're doing, they're incorporating smart technology and AI components that's going to just streamline things to an efficiency level we've never seen before, which is interesting for real estate. I mean, I think it's going to have direct implications. So I want to latch on a little bit to the private credit stuff. So, you know, we've, we've seen, we've read, we've heard about this huge explosion with private credit. You know, private deals being done, private debt, a lot more flexibility in that space and you know, a little bit less transparency. So maybe just give me a little bit of background on the thesis for you guys to put maybe such an emphasis on that and what you see that looking like over the next, call it five to 10 years.
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Yeah. So when we think of portfolio construction and particularly in the private wealth space, we think folks are seeking the diversification that private real estate can achieve, but also the nice strong income components and that sort of lower volatility stability, inflation hedge. So when we think of the portfolio construction and the need for some liquidity as well. Right. When you, when you're talking about products that have some semi liquid componen components to it, the private credit has generally a shorter duration than equity. So it's a great tool to have in a portfolio to bolster income distribution, to provide stability with that equity behind you and then to have some shorter duration which kind of comes back to your portfolio and kind of refresh the portfolio. From an opportunity standpoint we continue to see, obviously there's been a lot of, it's been an incredibly compelling opportunity over the last, what, 24 months or so. But historically there's always been a needle to fulfill lending, particularly in that kind of gap for a lot of people that, you know, where the traditional lenders end at what, 50 to 60% depending on where the market is and what the asset is. And a lot of folks don't want to put 50 to 40 to 50% equity in. Right. So there is a market for that kind of mezz lending space. And then we're also seeing an opportunity, particularly in the construction side at times the limitations from the banks have been much more challenging there. So there's an opportunity to be a bit more of a niche provider, I think, of credit. And even as SP tighten, we still think that there's really an opportunity in the marketplace to solve a capital stack problem for folks and we're excited to do that when it's appropriate.
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Yeah, I think you hit it on the head. I mean, this is not new. I think what we've seen is just a more sophisticated approach to the capital stack and people creating opportunities where, you know, they exist. And now you're bringing institutional excellence, execution, understanding. You know, you guys obviously, you know, as big as you are, have your hand on the pulse of the market and so it provides you with some insights that maybe 10 or 15 years ago, if we go back to the GFC, you know, there was a need for this private capital, for rescue capital, for, you know, mez debt to come in. It just wasn't really sophisticated at a level that could be executed at scale. And I think that's been a primary shift that we've seen. There's shops like yours and others have really filled that void. And you know, quite honestly, I think that's one reason why we haven't seen the type of distress that we all would have assumed with this, you know, fed raising rates 500 basis points in 18 months and everything else that's transpired over the last five or six years. That space has really provided kind of a lifeline for the market. And what we're seeing now is a lot of optimism returned to cre, I mean even for office. This last week at CREF C we saw and heard many lenders saying they're no longer pencils down on office. Now they're not saying they're lending on office like industrial or multifamily, but they're at least listening. And I think it's a really positive sign for the market. I don't think we would have gotten there had we not had some of this private capital kind of filling the void. And for folks that are placing those loans in that space, you're getting great returns. And if you have to take the property back, you have the ability to execute and operate and transform the property. So maybe give us some insight as your role has transitioned. You talked about a couple of different roles that you've held with Clarion. What does the day to day look like for you now when you talk about private wealth? Are you meeting with individuals, are you meeting with other firms? What does that look like for us?
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Sure. I mean first it's really working close with research and strategy. Right. Because we have to think top down themes. Where are we thematically looking to invest and then location wise and working to take the data that we have. And that's another kind of benefit of AI right. The data like a firm like we have and then the data you can get on the marketplace from folks like you guys. It's really helpful to be able to process all that. So a lot of it is overall strategy, thinking about where we want to go, how do we achieve the goals that our investors are trying to seek. Right. So that's one, two working on, on executing transactions and, and we have a team to do that but, but obviously we need to communicate clearly those goals of what the portfolio is so that the folks can focus on trying to find the right opportunities and then we collaborate with them to, to execute. So that's kind of role too. But yeah, a lot of it is, is focused on, it's more on platforms of what I'm doing. So I, you know, you, you really need to get on lots of different platforms in order to, whether it's wirehouses, registered investment advisors, independent broker dealers. And so you're, I communicating with those folks what our goals are, what we've been achieving and then trying to get, get our products distributed more through, through those, those different channels. So it's, it's kind of a multifaceted role of, of Overall strategy execution, of which there's, you know, hundreds of folks helping there, and then communicating the overall vision of what we're attempting to do to have more people have access to our products.
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Yeah, I think that's a great summary. And I, I mean that, that's the part that I love about real estate is it's, it's so dynamic. And while it's always going to be a relationship business, the part that you talked about, data and strategy, I think is becoming an ever increasing important component of the equation because you need to, as, as participants, market participants, become more educated on their own because they now have access to more resources. It's incumbent on, on all of us that are, are trying to transact or do deals or pitch our services to become even that much more informed. And so, you know, you talked a little bit about, about what are some central themes that you guys look at. Are you looking at certain economic demographic fundamentals? Are you looking at property performance? Like, what is it? Without giving away the secret sauce, obviously, but what is it that really drives a positive narrative for you guys? You know, from a CRE perspective?
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Yeah, I mean, we definitely are looking for tailwinds. And so it's great to hear on the office side that there are more green shoots, especially when you know what you've been seeing recently. We've been seeing that too. But big picture, we're looking for where there's more tailwinds. And we don't think there's a ton of tailwinds yet in the office sector. So we start with kind of macro themes. Demographics, you mentioned it already. So you have those millennials really in their prime spending housing years. And then the boomers are living longer and technology's helping with that. So those are kind of two, two tail ends. One pushing kind of industrial necessity, retail housing on the millennial side. And then on the boomer side, senior housing we think is very compelling today, even maybe medical office and stuff like that. So the demographic story drives tremendous amount because obviously it's really a simple. Real estate's quite simple. Right. Supply and demand, and you need demand. And the demographic story drives the demand. Innovation again, whether it's AI with, we've talked about robotics, healthcare, changing. You've mentioned data centers. We can talk about that too. But a big picture, the innovation side, E commerce penetration on the warehouse side. And so we think that innovation story is driving. And it's driving markets too. Right? Those innovation markets. San Francisco is definitely kind of back in many ways driven by AI and technology, but there's other markets that obviously this chip manufacturing and investment and that type of thing is really affected as well. You know, for a while it's been, it's been shifting globalization patterns and that only continues to accelerate. That's providing new opportunities on the warehouse side and is also with the investment in manufacturing, providing new kind of housing locations and places like that. So it's kind of pushing us to think differently about where we're investing. And then, you know, the housing story is a bit more complicated today just given there is a little bit of oversupply in certain locations. But overall, you know, the affordability challenges and the housing shortage is, is real. And there's. So there's tailwinds in that sector kind of macro for the long term. So those kind of four major themes drive us to the sectors that we're looking for. And it's pretty, I guess, simple in that way. Obviously then to find the specific strategies and execute is more challenging, but that's what we're focused on.
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Yeah, no, I think that's a great explanation. And I mean, for those that are listening, I mean, that's the playbook in terms of just how you run an efficient, productive shop. I mean, those are the primary drivers of real estate value that are fairly universally accepted. Obviously the challenge is just finding the data, analyzing the data, having the people that can execute doing all the stuff that you guys do every day. I mean, that's, that's where the magic happens. The, the understanding of the tailwinds is fairly straightforward if you can, you know, manipulate data. But it's the execution part that really differentiates you guys and others from, from the rest. And so it's, it's an interesting time. I mean, I like that you talk about some of the technology and some of just the transformation. I think senior housing is very interesting subset, you know, multifamily. We could go on and on about that. I think there's some political pressure with multifamily in certain markets with rent control, rent stabilization. Obviously New New York is kind of going through that right now too soon to see what's the, what the impact's going to be on that. But I think a lot of people probably are, you know, putting a little yellow flag up and saying we're not real sure about that market for some reasons that can't be quantified today. What about tariffs on the industrial side? I mean, that's been a huge talk track for people with Liberation Day this last April. Is that something that you guys have felt the impacts for? You think if, if you have, what does that look like? If you haven't, do you think you will? What is, what have tariffs meant for industrial and your guys's perspective?
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Well, as we've spoken about right through Covid, the warehouse sector, obviously, I mean Amazon took every space they could right in, in the first kind of years of COVID and then, and then everyone else followed behind people. It's not, as you mentioned, this isn't rocket science. So strong demand, people build. Right. There's a response. And as we know, it takes a little time to build now, warehouses build faster than housing, for example, but it still takes some time. Right. So there's always a bit of a lag. And you know, in our lives we've seen new supply obviously can really affect how a market works. So there was a bit of new supply coming, particularly in certain markets. And then obviously at the same time there was. The tariffs were announced earlier. Well, I guess last year now and certainly put a slow on demand. So leasing certainly was a bit more challenging last year. And certainly, you know, the human brain's pretty interesting, right? It thinks that the reality it's in is the reality going forward. And so everyone was getting used to the fact that everything leased up instantaneously or way ahead of time. We're actually back to a more, almost more historical vacancy rate. So we're actually not, we're not, you know, the vacancy rate has gone up a fair amount, but it's back to sort of historical levels. Right. So, but certainly the tariffs did affect the leasing market, you know, over the last six to eight months. But, but we are seeing space absorbing, we're seeing vacancy rates start to certainly stabilize and potentially go down. And so, you know, I think, I think the playbook is generally understood today and people are making business decisions and we're seeing absorption and leasing improve to more normalized levels.
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Yeah, and two more questions on industrial, then we'll transition to data centers. But on industrial, I think you, you talk about a key point. Sometimes we get a little excited about current trends. So people want to underwrite vacancy at a very small number because the last 18 months or 24 months have been really aggressive. But to your point, if you look at a 10 year average of what vacancy is on a stabilized basis, where industrial has retreated to in some markets is right where the historical stabilized occupancy should be and vacancy should be. And so I think for folks that are prudent in their underwriting, you know, whatever pullback we've seen shouldn't be alarming. It's really just reverting back to the mean. And for those that were aggressive, obviously that's challenging for them. But in the moment you have to kind of stay disciplined to those, those kind of historical stabilized operating metrics. I think the other thing was you mentioned Amazon and this is just more personal question for me in terms of, you know, I think Amazon's a very interesting case study. They signed a lot of long term leases that a lot of build to suits that were done at the height of the pandemic. And listen, their business has taken off and I think E Commerce is going to continue to grow. I mean I can assure you the number of Amazon packages that get dropped off at my house is not decreasing. I think I'm on a first name basis with the Amazon driver at this point. There's more than one driver that comes to the house. So it's an interesting dynamic. But are there going to be some potential challenges when those leases roll in the sense that those buildings by definition usually have a little bit awkward land to building ratio. They're heavily trafficked with trucks. If Amazon decides to pull out, is there a viable alternative use? Does Amazon have the leverage at the end of the lease term? Just how do you view something like that? It doesn't have to be Amazon specific per se, but I think that's a really great case study given where we are in the market.
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A
Well, I think it's a great question on residual value when you invest in real estate and making sure you try to understand what that next lease looks like. And it also gets into your duration of ownership as well. Right. Do you want to own through that releasing? So I think we've been very thoughtful or we've attempted to be thoughtful about about those more call it idiosyncratic, any kind of warehouse or any facility that gets kind of highly idiosyncratic and how you think it through sort of on the other side, you just, we just don't know. Right. I mean look at industrial outdoor storage is actually a real focus today and that's more of these flexible spaces. And so I just think you have to think through what that residual can be and be on the. To your point of, you know, going back to historical fundamentals and just you can't assume that the same tenant's going to want the same thing in 10 or 15 years from now. Just especially when it gets specialized. Right. And maybe that gets a little bit to the data center conversation as well. But I think that's where flexibility among space is key and where from a Real estate investment perspective, the assets that became more idiosyncratic, like a mall where they had this unique model of the anchor inline space or even huge floored office buildings. When the uses become, become so specific and then demand changes you, then that's where the big challenges have been over the last 10 or 15 years in our space. So I think you're absolutely right. You have to think through how a space can work particularly on a reversion and the flexibility of that space going forward.
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C
Yeah, I mean I think that's, that's a perfect answer and how people should approach it. It's just, it's enticing when you have that credit tenant and a lease out there, given some of the other challenges that come with leasing to maybe less credit worthy folks. It's just a balance. Right. And I think from a portfolio perspective you probably want to have, have some allocation and exposure to both because I think that probably gives you the best optimal risk adjusted return. So thank you for the insights on that because that's something that I've always just wondered is if you're on the development side or doing the build to suit or you own the building that Amazon leases for 25 years. You love that deal, but at the end of the term you may not love that deal so much, especially if the times have changed. And it's an interesting dynamic, but I think you eloquently walked through how you should approach that. So, so let's talk a little bit about data centers. I mean we've had about 375 episodes. I think on our last 200 we've had some mention of data centers or AI just because that's how GDP. I think it represents 1% of GDP growth at this point. And the spend is phenomenal around AI and data centers. So what is your take on data centers? Are they real estate, are they a hybrid? Are they materially dependent on infrastructure that the operator can't control? What's your house view on that?
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Yeah, well, maybe go back to the story that we try to tell investors and what we think we're trying to achieve through private real estate investing. And that again is that sort of diversification in your portfolio and stable long term returns. And so you mentioned the concentration in AI investing. It's incredible, right? I think everyone's portfolios are highly concentrated in AI. Just if you own the S&P 500. Right. The Mag 7 is what, 30 to 40% of those returns. You talked about GDP participation as well. So it's exceptional and the demand is Real. We kind of have taken the opinion that in the private real estate space we're trying to provide more diversification for portfolios. And so we haven't focused on the data center space from that perspective. I also think there is an argument that with the components of power and how it's affecting communities with the power, and it is much more in many ways an infrastructure play. And then talking about idiosyncratic real estate. Right. It's just, just, it kind of fits that mold too. So again, obviously the demand is real. It's a great asset class potentially. I think we think it's a bit more of an infrastructure play today. And as we're trying to articulate portfolio diversification for folks, we think there's an attractiveness to focus on the, we'll call them more traditional sectors in the sense of, although there are the new sectors coming in, but the ones that are real kind of real estate driven, which, which have those components of, of income stability that, that we think that the asset class is trying to achieve, that's a prudent approach.
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C
I mean, if you stick to the main food groups, you obviously have a lot better understanding of the drivers and you know, what levers you can pull. Whereas in the data center space it's, I mean, we're learning as we're building and I think it's a very interesting construct because of the concentration, as you mentioned, and this insatiable demand. If everything goes to plan for all these folks, like there are going to be some people that hit some huge home run grand slams around the bases twice type of return. If it goes the other way though, I think it's going to have some catastrophic outcomes for some people and none of us know enough at this point to know how that's going to play out. And you know, I have to imagine that with the power constraints and some of these other challenges that are there, there's going to be a huge push to create something that avoids some of those issues. And so I think we're in like Data center version 1.0. And I think in 10 years we're probably sitting here having a discussion about a data center that's powered by something completely different or some new technology that doesn't exist at scale today. But it's an interesting construct and it's, it's amazing. I've, I've, you know, been in the real estate space 25 years and I've, I don't, I can't remember a property sector that has captured as much headline attention as much capital as much people, as many people talking about it as the data centers have in this very short run up. And it's, it's interesting because I think, you know, from an AI perspective, I mean, we're a data and technology company on the AI side. Like I'm 100% bullish on that. I see the realized gains that we're making as a company, what we're building as a firm for consumer use. I can't imagine a world where we're using AI less or that AI is less productive than it is today. Like it's increasing exponentially month over month, quarter over quarter in terms of reach. But the data center stuff I think is a little bit, it's a little squishy for me. I don't quite have a firm feel for what that looks like. So you mentioned senior housing. You know, are there any other, you know, is that, is that something if you, if I were to say, you know, Rick, what, where do you think, think the market is telling us the next opportunity is broadly, and I know that's an unfair question because real estate's a local hyperlocal endeavor, market specific. But is it senior housing? Is it something else? What do you think the next couple of years maybe where the biggest opportunities lie?
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A
Yeah, I think, you know, we've, we've touched on the, the themes driving the assets we liked. But I think there is a, there does appear to be a window today that the senior housing story is, is compelling and it's a combination of, I mean, we've been talking about the demographic story of, of the baby boomers for time, but it appears that when you hit 80 is when really you start to make different decisions for sure about living and that the first round of boomers are hitting 80. So the number of 80 year olds is doubling and that wave is finally hitting the 80 year old spectrum. And then on top of that, obviously during COVID the sector was hit hard and tragically so. And so you have this compounding effect that the sector I think had some real challenges. So not a lot of new supply to sort of anticipate for this wave coming. And we think pricing is still relatively attractive in the sector. So I think you blend that all together and that does have a compelling story today. And it's something we're focused on and we're really dedicating resources to. I think the other kind of sector that's interesting or unique is the industrial outdoor storage space. And that's a bit more of, it's almost maybe like the storage business was many years ago, where it's still, I think, pretty disjointed. It's a lot of work to put together a portfolio because the assets tend to be smaller and little counterintuitive to say that there's limited new supply because you're like, well, it's just kind of a piece of land. But, but, but actually communities don't generally zone for, you know, outdoor storage space. They don't provide a lot of jobs. Right. They're not huge, huge tax revenue. People generally don't like, especially in nice communities, don't like to see like the, they like their power lines fixed quickly, but they don't like to see the Con Ed trucks. Right. So. Well, I'm in New York, so, so you blend all that together and we think there's actually good rent growth in that sector as well. And the current yields are a bit higher than more traditional indust. So those are a couple of sectors we're a bit more focused on today. But we do believe in the industrial story, as you mentioned. We totally think that all of those macro themes that we talked about are pushing towards more industrial. I do think there's stuff with the data centers like power, we talk about robotics and the electrification of delivery fleets and all of that. So there are things I think we're learning even from the data center space that go to more traditional industrial of just you need more power, you need to modernize your properties. So it's kind of interesting as well. And then just that again, we've talked about housing. We like, like, we like the housing sector too, but, but, but there's nuance around that today as well.
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C
Yeah, I think that's a great Overview on the iOS stuff. I mean, it's, I think the challenge for you guys probably is to your point of like getting scale because it's just, it's a really niche asset class. But I do, I'm with you. Like, I think there's strong growth prospects there. It's, it's supply constrained for the reasons you mentioned. So if you can find good operational locations, like there's some really good value for, for investors there on the senior housing, you know, are you guys looking at like, assisted living? Like, where in the spectrum of senior housing? Because I think, you know, as you kind of, you know, you mentioned some of the idiosyncratic stuff on, on the industrial or on the data center side, but some of these senior housing with the skilled nursing or continuing care, it becomes really an operating business. It's, it's, it's, you know, difficult. So are you on the upper end of the spectrum with just assisted living or age restricted or do you guys think that the entire sector holistically is opportunistic?
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A
We've tried to, it might be more opportunistic as a whole, but we've focused, you know, again on the real estate side of things. So more the independent living, the assisted living and memory care could be part of that. So we definitely focus more on that portion of the, of the space. It is, you should get a premium for them because you're, you're absolutely right. It is more operationally intensive. And so we, we want a premium and you're currently getting paid a premium. So we believe that makes it compelling. But you're absolutely right. Like, you have to be really thoughtful of risks in that as well because as we've seen over the last five years, there are risks to it and there are operational risks and you have to be, you have to be sure that you're partnering with good people and that you're operating it well and you're being thoughtful.
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C
Yeah, the staffing, the, the licensing, all of those things are challenging for real estate investors, especially on the private side where, you know, for the reasons you mentioned, they're looking for a specific type of asset or investment. I think that that creates some challenges. But are there any things that we, anything that we haven't touched on that from a cre perspective that you think our audience would en hearing from you about? I mean, I know we've, we've covered a lot of property types, just broad, maybe market sentiment or, or something that you wish people knew that maybe they don't. Anything like that that you'd like to opine upon?
- [30:06]
A
Well, I mean, I think big picture, we're, you know, I'll say cautiously excited. I mean we think we're entering a new cycle. We've seen, you know, five quarters of positive returns, mostly driven by income. Right. Like appreciation has been, has been muted, but it's certainly, I think we've, we've adjusted to the new higher interest rate environment and, and given that we actually see the really coming down and so, and fundamentals as we talked about, even though vacancy rates might be higher than they were at the bottom, they're generally at or below kind of long term averages. So fundamentals in a good spot, new supply really down those thematic demand drivers we talked about really, I think push demand and then the stabilized tenure is really important. And so we've seen now a fairly stabilized 10 year. The Fed has had had a You know, a positive effect over the last year to, to the real estate space. I think we're seeing transaction volume pick up and, and I think that stability is really helping transaction volume. So you kind of pull all that together. And, and we think, we think it's a, especially compared to, you know, the last, certainly 24 to 36 months from a real estate equity perspective. It's, it's actually becoming an exciting time to, to find opportunities and we think deploy capital. So we're, we're, we're, I'd say, cautiously excited about, about the opportunities we see today. Today.
- [31:20]
C
Yeah, I think that's, you know, probably a mild version of what we heard at CREF C. I think people would, would have. The overarching theme for me was people were overwhelmingly optimistic. Like, I think the caution part for most have been taken out, which makes me a little nervous because I think by definition you should always have some cautious excitement or optimism just around the market. It's, there's always uncertainty. But if it does feel like, I mean, the, the issuance that we saw in 2025 on the CMBS side, you know, we're about 126 billion. We're estimating 130 to 140 billion in 2026, which would be, you know, another high watermark outside of the gfc, you know, pre pandemic or pre. Pre GFC years, which were just off the charts. And so I'm with you. I think this is a really great time. And I, I love the idea that, you know, we're talking about some of these asset classes that five or ten years ago maybe weren't mainstream for people. And I think to your, you know, charge of trying to find new opportunities for investment, this is a perfect time and a perfect case study for why that's a viable option in today's market. So, and I got to tell you, Rick, I mean, we, we do a lot of these and you've been great. I mean, you definitely have a career in podcasting, interviews, whatever. If you decide that the, the real estate gig is not for you anymore because you've, this has been perfect. I mean, incredibly well done. So thank you so much for, for joining us, and I think Haley's going to lead us out, but really appreciate the time and your, your responses and professionalism and understanding has just been incredible as we kind of had this dialogue.
- [32:48]
A
Well, thanks, Lonnie. Thanks, Haley. It's been great. And, and I really enjoy your podcast. So it's, it's fun to be on and I'm not gonna, I, I'm not gonna take your job just yet. But, but thank you so much for having me. I appreciate it.
- [32:59]
B
Yes. Thank you so much.
- [33:00]
A
Rick.
- [33:00]
B
Before we let you go, can you just tell our listeners how they can get in contact with you or learn more about your business if they want to reach out?
- [33:07]
A
Sure. Probably LinkedIn is the best spot. So I'm Rick Shoup on LinkedIn. You can go to ClarionPartners. Follow us. And we, we're, we're trying to, to produce more content to, to engage with folks. So, so please, so connect with me there. It's probably the easiest place. And, and thanks for mentioning that.
- [33:27]
B
Awesome. Well, thank you so much for sharing all that you're building and doing at Clarion. We're really excited to continue to watch how your business grows. So with that, we'll close this special podcast. Thank you, Rick, for joining us today. Join us later this week as we look at what's happened during the week and how it may be impacting you. If you have a question or just a comment, comment. Send an email to podcast at trep. Com. Until then, visit trep.com for more info and subscribe to the TrepWire podcast with your favorite provider. Thank you for listening and stay well.
- [33:58]
C
All right.