← The TreppWire Podcast: A Commercial Real Estate Show
The TreppWire Podcast: A Commercial Real Estate Show
390. Improving Liquidity, Banks Beat Earnings, a 1031 101, & More on Y'all Street: What It All Means for CRE
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Foreign.
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Welcome to the Tripwire Podcast, the show where commercial real estate needs data and insights. This is our week in Review for the week ending April 17, 2026. I'm Haley 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, and Steven Bushbaum, Head of Applied Research and Analytics. This week's macro backdrop gave markets a lot to digest. March PPI came in hot enough to remind investors that inflation is still not fully behind us, with energy continuing to drive a lot of the pressure. That helped reinforce the idea that the Fed is not in a rush to cut rates. We also got a fresh round of bank earnings. The big banks generally posted solid results, helped by trading and market activity. But management commentary still struck a cautious tone around volatility, geopolitical risk and the broader economic outlook. And on top of that, President Trump escalated his criticism of Fed chair Jerome Powell, while Cleveland Fed President Beth Hammack said rates may need to stay on hold for quite some time. And in this week's episode, we'll also share a 101 on 1031 exchanges and dig into several of Trapp's latest CMBS trading alerts. So Stephen, as you look at this week's inflation data, bank earnings and the latest Fed commentary, what do you think it all signals for financing conditions and the outlook for commercial real estate?
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C
I think the big takeaway is that the economy still looks fairly resilient, but the path to lower rates is not getting any cleaner. I mean, shoot, if it tells you just what risk sentiment feels like. This week the Nasdaq was on a 10 day winning streak or 10 day positive streak. It's the longest since 2021. I mean that's, that's wild. So the momentum clearly has shifted back a little bit. Now the PPI report was a reminder, like you said, that inflation has not fully gone away and energy was driving that headline. So headline PPI increased 4% year over year. The consensus forecast was a 4.6% rise. So a pretty good surprise. To the downside, there's a and month over month it increased 0.5%. The forecast was for 1.1% increase. So again coming in much cooler than what everybody was expecting. Core PPI, which feeds really more into the PCE index. Core PPI came in at 3.8% year over year versus forecast of 4.2 and 1% increase month over month forecast was for a 4, 10 increase. So the data was not alarming at all across the board, but still firm enough to support the idea that the Fed is definitely going to stay cautious and probably on hold for quite a while. Then on the bank side, earnings was, I mean, God, they blew it out of the water. So the large bank results were generally solid. But like you said, Haley, the management tone was still cautious. So the amount of volatility and uncertainty and downside risks that are out there tell you that even if the system is stable, folks are still going to be cautious and it's not an all clear environment. And particularly on equities trading, one of the messages that was repeated was that, yeah, we did very, very well on our equities books, but don't expect that to repeat itself. And in fact, you could say we definitely don't want that to repeat itself because that means that volatility is again, still very high for the Fed backdrop. Again, there's still no change in signal, there very much staying on hold. For me, the main benefit that I see right now is at least we're not talking about Fed rate hikes. So for commercial real estate, the interpretation is a little bit more nuanced than saying, well, yeah, we're kind of tight across the board. It's a K shaped economy, but it's also a K shaped financing market. So lenders are still being a little bit selective as you go out the risk spectrum. And when you look at portfolio pricing spreads, we're still a little bit wider than where we were at the end of February, at least for the riskier LTV buckets. On the lower risk side, you're actually seeing spreads continue to grind tighter for certain property types and lowest LTVs. So very much K shaped pattern there. Now just briefly in private credit markets because this has been sucking up a lot of the airtime recently. And this is where I think it's been really interesting this week. Wednesday morning the news broke that Pimco had just purchased 400 million of bonds from Blue Owl. They issued on Monday. That was the entire issuance. Now, a month ago, Pimco was out there saying that they were staying away from a number of quote, pretty bad loans being sold by firms that were seeking to meet investor redemption requests. And in fact, somebody from Pimco had mentioned that these loans were not being priced at levels that they found attractive. So it seems like we've gone through a bit of a recalibration and risk pricing and that deals are clearing now. It doesn't mean that some of those bad loans that they're referring to may be cleared they might have had to rejigger what was being sold, but this is still an excellent sign for liquidity. So, in theory, anything with leafs up risk, rollover, risk maturity, pressure. This is the stuff that we've talked about time and time again. It still might be a challenging backdrop, but to me, on the private credit side, if that stuff is clearing, that tells me there's still a path forward at the right price. So the conclusion, the economy is holding up, we're not staring down the barrel of an imminent collapse and risk market and the gears of finance continue to turn, albeit with perhaps a little bit of sand in there. But there's absolutely a rotation and risk repricing or recalibration happening in the background that's keeping those gears greased.
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A
That's a lot for an intro, Stephen. I know, I mean, I probably can't go through each of those items, but I think there's a couple of things that I wanted to hit on the inflation stuff. I think it's relevant because to your point, these numbers didn't come in super aggressive where it's going to start sounding the alarm bells, but it does serve as a reminder that inflation is remaining to be persistent and it's not going away. And I think you're reasonable to expect that with the ongoing geopolitical crisis that there's going to be upward pressure on the energy component of that for the foreseeable future, which, you know, doesn't bode well, one, for consumers and two, for, you know, the Fed when they're looking at being able to potentially lower rates. I mean, I think for 2026, I mean, we're already in April. I'm hard pressed to see them cutting rates in 2026. I think at some point you might start seeing a narrative where people just are praying that they don't increase the rates in 2026. So I like that you said, like, we're not there yet. I think the position is still hold. There's really no impetus to raise rates, but it's got to be at least a consideration on the go forward if the energy component continues to push inflation higher. The bank earnings, I think, are good. I mean, it highlights that the market's still moving. Them showing positive results are great, but I do think the numbers are not being interpreted in a vacuum and they're expecting the markets to understand that there's a lot of stuff going on and there's a lot of volatility and there's a lot of things in the, in the markets that we have to contend with. And I think that's, you know, what kind of piggybacks on what Jamie Dimon had said a few weeks ago, which we covered. You know, there's, there's a lot of storm clouds out there and it may cause some challenge for them. And I think it forces them, as you mentioned, into just being more selective. And you know, it's, you know, on a relative basis that's probably still an improvement from where we were a few years ago where they were just pencils down. Like obviously we were hoping 26 and we were hoping, based on commentary at the beginning of the year that banks were going to be back full force. I think if I want to take the silver lining approach here, the fact that they're still active but being selective is still a net positive for the markets and instead and still not positive for the industry. So, you know, we'd love to get some of this, you know, broader macro volatility under control so they could get back to being in full force. But I think with positive earnings and them still doing deals, even for the, you know, higher end stuff, it's still a net positive for the marketplace. And you know, on the private credit, I mean, I, look, I think you're going to see this ebb and flow as, as markets kind of reprice and as you mentioned here, you know, I like how you said it's a recalibration and risk pricing and ultimately it just comes down is the price right. And I think that's something that amidst all of the headlines and everything else, that's what every transaction effectively comes down to is, is the price right. You can either usually negotiate price or term for a lot of these deals. If the price is appropriate, then you're willing to make the, make the bet. And so I'm, I'm pretty optimistic. As long as there's liquidity in the market, deals will find their, their price point where they transact and we've seen that throughout this last five years. So I probably take today's intro from you on a slightly more optimistic beat. I think despite the headwinds and some of the challenges, this is actually pretty positive territory for us given where we are, all things considered.
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C
Yeah, there's a lot of things out there that could get us down or frustrated if we hyper focused on them super easy. There's no lack of headlines in today's news to bum us out. But yeah, the liquidity signal that's been coming from so many headlines is really resonated with me because when things ultimately look their Bleakest, that's when liquidity clearly pulls back and we're not seeing that signal. So on the Blue Owl Capital bonds, those were known as obdc. Those were issued at what was found to be a relatively cheap valuation, paying a yield of 0.2 percentage points more than OBDC's existing debt. We call that the new issue concession. So it's the average concession that companies have paid this year. It's been 0.04 percentage points. So basically 4 basis points versus 20. So yeah, that's a pretty big difference compared to what we've seen earlier in the year. Five times your typical concession. To put this in perspective, Goldman Sachs private credit fund also sold notes recently. And the concession on that was double the historical average. Our recent average, those were sold at a 0.08 percentage point extra yield on Tuesday. So OBDC's notes were priced at a spread of 270 basis points over the equivalent. Treasury and Goldman's were priced at 255. OBDCS were split rated BBB by Moody's, BBB minus by S&P and Goldman's were triple B minus by Moody's. Now yes, I know Moody's goes B AA, but I'm just mapping that to the equivalent rating here to make things a little bit.
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Every time you said obdc, I thought you're about to break into a rap tune.
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C
I, I was really tempted to, honestly. We getting down with obdc.
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Oh, all right. For maybe next week's show, Stephen will have a chat GPT wrap for these new issuance deals.
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So we haven't talked about the housing or residential market in a while and this week we saw a headline that mortgage applications rise as rates fall to a one month low. So walk us through the latest mortgage rate data and any other happenings in the housing market.
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So it was really interesting this week, Steven. Mortgage rates fell to the lowest level in a month. So obviously when rates fall you see a lot of refinancing activity spike. And so you saw total mortgage application volume rise 1.8% last week compared to the previous week. This data comes to us from the Mortgage Bankers association seasonally adjusted index. Average contract interest rate for a 30 year fixed rate mortgage. These are loans that have conforming loan balances. So that just sets the upper limit, which today is $832,750 or less decreased from 6.51% down to 6.42%. Points did increase slightly to 0.62 from 0.61 including the origination fee for loans with the 20% down payment. So we have a couple of quotes here. Given the evolving situation in the Middle east and its impact on energy and commodity prices, Mortgage rates declined last week. That's according to Joel Kahn, an MBA economist, which they said in a release, you know, applications to refinance a home, which really are the most sensitive to that weekly interest rate fluctuation, increased 5% for the week and were 15% higher than the same week a year ago. I think this, Steven, is good news, but it doesn't change the underlining narrative that home prices are still trying to figure out where they need to be to get people off the fence. And now you add in a layer or a wrinkle of this economic uncertainty with potential for inflation where the energy inflation as we've said, hits people every day when they're filling up their tanks. It just maybe adds another wrinkle to that uncertainty for this market.
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C
Yeah, I feel like if the ten year treasury, and I know, I think residential debt maybe is being priced closer to the five year. But anyway, that's semantics basically. If the ten year treasury holds about where it is and we don't see a massive twist in the shape of the curve, we found out how to get deals done at these levels and if we can maybe come down slightly more, you see a boost. What I've really kind of dug into in the local market because this has been bugging me like what's driving some of these long time on market situations and what it seems to me, Lonnie, is there's a lot of people out there that are pricing existing stock at 1, 2, 3 year ago prices. They got that stuck in their head and they think that they can get top dollar from when new supply was lacking. Problem is you've had a massive amount of new supply stock come online and prices have calibrated and so it makes it really tough for certain homes to clear at these elevated price levels. And you're seeing folks capitulate on price. Fortunately, I think we are finding that equilibrium in select pockets. But it's wild just how dramatically different the time on market is for certain submarkets compared to where it was call it two years ago.
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A
Yeah, for sure. I mean a couple of things I think that you, that you mentioned there, that I'll speak to a lot of these buyer, A lot of these sellers, excuse me, they're forced to price where they are because they paid top dollar and they didn't have a lot of equity when they bought the deal. They maybe did an FHA loan Three and a half percent down payment. And so they're forced to try to get the same price because they're underwater if they sell for anything less. And in residential real estate, like that's a huge emotional tax. Residential sellers have a really hard time understanding that sometimes you got to take the loss and move on. There's not a lot of residential sellers trying to go to closing with a check to get out of their house. Now if the economy really starts to falter and unemployment really ticks up and people start losing their jobs, obviously you do what you have to do. But if you're just, you know, looking for a different place or maybe unsatisfied with your commute and you're trying to sell out of convenience, you're not going to lower the price to where the market maybe demands. The other thing that I think is an interesting wrinkle, and I think we'll talk about this over the next couple of months, is in a lot of markets you're finally starting to see some of these properties hit foreclosure auction. And in the residential market, it's really interesting because if you have 10 homes that sold in a neighborhood and one of them was a foreclosure, that foreclosure price doesn't really impact the market. But if you get to a point where you have 10 properties that sold and four of them or five of them are foreclosures now, that really starts to bring down the pricing for the non foreclosures. And so I've noticed a pretty significant uptick, at least here in Texas, in several markets where you're starting to see more bank owned assets get auctioned or come to auction. And if that starts happening at scale, it's going to put even more downward pressure on pricing. So I think the interest rates are not the issue anymore. People have understood this is the rate. I think to your point, the math tells you that sometimes prices have to come down. A lot of people just don't have the economical wherewithal to sell at a lower price, but they're going to be forced to even more so if these auction properties actually hit the market.
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C
That's right, yeah. And the homes that are clearing like you mentioned, have been following very closely the basis that are unfortunately, you know, in Texas, you're a non disclosure state. You don't get to see a lot of times those prices unless you have the, well, MLS subscription. But in a lot of other states where it is public disclosure, you can see the seller's basis and people like the buyers are going, come on, man. You can't price to 30% inflation on your purchase back in 22. I'm not paying that. I'll pay a 5% annualized inflation rate relative to your purchase. I get it. You got to clear broker costs. I get that. But we're not paying 30%.
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It's really funny. You see some of these things online. It's not funny because it's negatively impacting people's finances. But you see people that, you know, paid $2 million back in 21, and then they list the property at like three and a half now. And then they just price cut, price cut, price cut, price cut. But they're still a million dollars over where they paid. And to your point, like, just not happening. It's not going to happen.
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And let's pivot here to bank earnings, all six of the major names have reported this week. So, Steven, walk us through some of the big bank earnings and what the headline is and what you've seen from all of their reporting.
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C
Well, Goldman kicked things off on Monday. J.P. morgan, Wells Fargo and Citi came in on Tuesday. And bank of America and Morgan Stanley wrapped it up on Wednesday morning. The headline is remarkably consistent. Every single one of these banks beat on earnings and every single one of them set a record on the equities Trading desk. That's not a coincidence. It's a volatility trade. The Iran conflict, the oil shock, rate uncertainty, all of that is driving massive client activity. But underneath all of that, there's a tension building and it's one that matters for a lot of commercial real estate. So let me run through each name quickly and we'll pull the thread on what it means for cre. So for Goldman Sachs, this was their second best quarter in firm history. Revenue was up 14% year over year to 17.23 billion. Equities desk posted a record quarter at 5.33 billion, up 27%, driven by prime brokerage and cash equities. That's roughly a billion better. Better than their prior high watermark. FICC trading was the soft spot, down 10%. Weakness in rates. Mortgage and credits were the problem. Advisory fees nearly doubled 89% year over year. And there is volatility tied to the Iran conflict and broader geopolitical uncertainty as concerns. JP Morgan net income up 13% to $16.5 billion. Revenue was up 10% year over year to $50.5 billion. Markets revenue had a record $11.6 billion. Investment banking fees were up 28%. Fixed income trading was up 21% on commodities, credit and FX activity. Provision for credit losses actually fell here. Lonnie, this is great news. Provision for credit losses fell 24% year over year. The 2.5 billion with a modest reserve bill and then in CRE banking revenue that was essentially flat 880 million. Not a growth engine, but not a problem child either. Dimon's shareholder letter warned that the Iran conflict risk oil price shocks that could keep inflation sticky and rates higher for longer. Wells Fargo a slight beat on earnings. Slight miss on revenue. Revenue of 21.4 billion. That's up 6%, but below the $21.77 billion street estimate. Net interest income was up 5% year over year. Non interest income was up 8%. The loan growth story is telling here. Average loans are up 10% year over year, but that's almost entirely C and I, which surged 23%. CRE loan balances actually continued to decline. That's been part of their ongoing strategy here is to basically wind down some of that book or let it run off, I should say. Excuse me. 4 billion in share buybacks. CET1 capital was at 10.3%. So CRE, particularly office, remains the key watch item as the bank operates post asset cap with more freedom to grow but ongoing legacy exposure to work through Citigroup. Net income was up 42% year over year to 5.8 billion. Revenue up 14%, the highest quarterly revenue in a decade. Market revenue crossed 7 billion, up 19%. Equities up 39%. This was a record m and a quarter for the banking franchise. Wealth revenue of 11%. They reaffirmed their 2026 net interest income guidance, which was a good confidence Signal, and returned $7.4 billion to shareholders at a 134% payout ratio. Bank of America best earnings per share in roughly 20 years, up 25% year over year to earnings per share of $1.11 or $1.11 versus $1.01 Consensus net income of $8.6 billion. Revenue of $30.3 billion, up 7%. Net interest income $15.7 billion, up 9%, better than the bank's own expectations. Equities trading up 30% to $2.83 billion. Another record desk quarter. FIC trading was more muted, up just 2% to $3.5 billion. Provision for credit losses fell to $1.3 billion with a $72 million net reserve release, a notable shift from the builds that we've been seeing in recent quarters. And Commercial Reservable criticized. Exposure declined $3.3 billion year over year. And non performing loans ticked down, suggesting the CRE workout cycle may be past its peak. At bank of America, Moynihan struck a measured tone, saying there was strong momentum but watchful of evolving risks. And finally, Morgan Stanley. Their net income was up 29% to 5.6 billion on record revenue of 20.6 billion. Their return on tangible common equity, or ROTC, was 27.1%, which is exceptional profitability for some context. Return on tangible common equity strips out goodwill since past acquisitions can distort profitability. And this provides a cleaner measure of management's efficiency in generating return from existing capital. So this is extremely good efficiency we're seeing from Morgan Stanley. Equities trading posted a record 5.15 billion, up 25%, led by prime brokerage and derivatives. Fixed income surged 29%, benefiting from energy market volatility and commodity flows. Investment banking FEES were up 36% to 2.12 billion. Advisory nearly doubled. Wealth management hit a record 8.52 billion in revenue with, get this, 118 billion in new assets. Investment management was the 1 soft spot, down 4% on lower. Carried interest from private funds. Expenses up 12%, including 178 million in severance charges as the firm trimmed headcount. So a lot of numbers. So this was a 6 for 6 beat. But a few things jump out. First, the trading capital markets business was thriving in this environment. Every single one of these banks crushed it on equities trading this quarter. Volatility is a revenue engine for these firms in the Iran conflict, oil shock, rate uncertainty. All of this was driving trading. The upside of dislocation for the Wall street franchises. Second, credit quality is holding and in some cases actually improving. Provisions were down at JP Morgan, bank of America and Citi. And bank of America posting a net reserve release this quarter as it saw its commercial criticized exposure drop by over 3 billion year over year. None of these banks flagged a meaningful deterioration in their loan books. But the tone is cautious. Dimon's shareholder letter is a sign of that. And Moynihan again being watchful. Third, and finally, this is where it gets relevant for us. The Siri lending signal from these earnings needs to be read carefully because there's bifurcation happening. Wells Fargo, Siri balances are shrinking. JP Morgan's were basically flat. Goldman City and Morgan Stanley don't play, you know, meaningful in the balance sheet area. And bank of America showed some signs that the Siri workout cycle may be cresting again. Getting Back to those criticized. Exposures declining and NPLs ticking down. But they're not exactly leaning into new Siri originations either. So if you looked at just the big six, you'd think the banking sector was pulling back from Siri entirely. But that's not the full picture. If we zoom out, widen the lens, the H8 data tells a different story. Large banks, that's the 25 largest banks, typically that's roughly 100 or 150 billion in assets plus cohort. They've been pulling back from CRE pretty consistently, running about negative 3% year over year on average through the first quarter. But smaller banks have been growing their Siri books at roughly positive 3% over that same period. So what you're seeing is the bifurcation. The large banks are redeploying capital and CNI in trading. Smaller and regional banks are stepping in to fill that gap for cre. So it's important because it reshapes the risk distribution as it concentrates CRE exposure in the institutions with in some cases, less capacity to absorb losses if things get ugly again. We're not projecting it well, we're just saying this is a fact. You don't have the fortress balance sheet that J.P. morgan does to back some of those assets. So it also reinforces the private credit rotation theme as borrowers who can't get financed by the large banks are either going to the regionals, they're going to debt funds, or they're extending and pretending. And in a rate environment with 120brent and a trapped fed, the cost of all three of those options goes up.
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A
Yeah, a couple of thoughts on, on these numbers, Steven, if you go back just to the, the credit provision loss, their provision for credit losses here, I think that should be a bigger story. I mean, if you look at JP Morgan, as you mentioned, provision for credit losses fell 24% year over year. And then if you look down at bank of America, they fell to 1.3 billion with a $72 million net reserve release. Everyone was watching those figures every quarter when the market was going the other direction because that was a pretty significant indicator of where we were. If you look at this now, I think it is a positive story as we were kind of talking about on the lead in, like they're not, they're not incurring the losses, they're not reserving for the losses because they have dealt with predominant number of the properties that were non performing. And so I think, you know, that kind of gets lost because some of the headline earnings numbers are so good. But from a CRE perspective, even with the pullback that you mentioned, I think that's a pretty significant takeaway from these earnings reports.
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C
Absolutely, I'm right there with you. The bank of America, I think paints it beautifully. And we've seen this in some of our taller consortium data as well. Feels very much like we're right at crest point and perhaps even past it for a lot of this stress. So if we can just calm down the financial market's frictions, we're spring loaded. I mean the pent up demand is there and the economy is primed to thrive. But right now we're still walking that knife edge with inflation breaking the backs of the lower end of the K shaped economy and concerns about does this start to become more of a growth engine issue than just an inflation issue.
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A
Yeah, one thing that you did mention here on Morgan Stanley, you know, their expenses were up 12% and you know, you, you called out that there was 178 million in severance charges. They're not the only ones that have had positive financial results that are also trimming headcount. Like I saw today that Snapchat announced that they're going to be laying off 16% of their workforce even though financials are really strong for them. And so, you know, those are things that kind of get hidden a little bit where they're, you know, there for a while we were talking, we actually had people monitoring layoffs and everything, company by company. You're not hearing that as much now, but it's, it's got a weird feel to it when you have companies doing massive restructures or layoffs when they're beating estimates on profitability.
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C
Yeah, I don't know if you saw, this is probably me and my, my Google history, I get in some pretty nerdy stuff. But one thing that popped up on my feed was Nvidia's chip. Sorry, not maybe it was Nvidia. It was one of the major chip designers. They said something that used to take eight to 10 months and I think it was eight to 10 developers. They got it down to an overnight process. Now that's not to say that AI can design chips and be a perfect substitute, But I mean, 10 months down to overnight, that's nuts. And then you heard recently in the past week another big name in tech and software was out there saying, look, we've been monitoring this extremely closely and looking at the metrics on produced code and it used to be about 60, maybe as much as 80, but on average about 60% of code AI generated with the new anthropic releases, they're up
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A
to 100% and it's here. These are not ideas anymore. These are not concepts. These are not some small cohort of coders and some super nerdy underground network like big companies. You know, I see it every day at our firm. I mean we're leveraging those tools and producing things at a pace that were just not achievable previously. And it's super exciting in the sense that it allows you to go from idea to production at a pace that just was, was not feasible in the past. And you know, I hope for people like I would just say everyone, I don't care what job you work in or what role you have, is going to have to have some general working knowledge of Claude code and some of these other things. It's almost like Microsoft Word and Excel and email. Back in the day people would list that on their resume. Proficient in Microsoft Office. You're going to have to have the same type of skill set with some of these cursor Claude type of agents.
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C
I can't believe we forgot to mention this headline. Lonnie, this reminds me of one thing that we'd be remiss if we didn't ment, I don't know if you saw this. President Donald Trump. They summoned top US banking executives to Washington on April 7 for an emergency meeting regarding cybersecurity threats posed by Anthropic's new Mythos AI model.
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A
Well, did you read that? So basically they gave it to like a couple, I don't know, some of the Fortune 100 companies. And it found so many vulnerabilities.
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C
Yes.
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A
That just they, they shut it down
- [32:08]
C
because it broke out of its testing environment. It emailed the engineers bragging about it breaking out and then it went back and tried to cover its tracks. Skynet is here.
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A
Look, it's some interesting times right now. Sometimes it's cool to be in cre, which just generally is a little bit behind the times when it comes to some of the stuff. Now obviously at our firm we're pushing the edge and trying to lead some of this AI implementation and adoption. But in the broader sense, sometimes it's nice that this is still a relationship business and people are like meeting for lunch and talking about properties because some of those things. Yeah, when you read them, it's pretty scary.
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C
Oh yeah. I mean it found an exploit, a zero day exploit that had been embedded in a major software piece, critical piece of our digital infrastructure. It's been out there for 27 years. Nobody found it, and it just. Oh, yeah, by the way, you might want to patch this. Oh, boy.
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B
So, speaking of breakthroughs and new happenings, the trading markets are about to get some even more news. We've talked about y' all street and the Texas Stock Exchange, but there's more news coming out this week, and I think it's a good time for us to touch on what's happening there. And we know trading is going to begin in July. So let's talk about what's happening with the Texas Stock Exchange and also the Dallas markets.
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C
This is absolutely wild. I can't believe this day is already upon us, Lonnie. Texas will become a major financial capital, maybe even a mecca here just in the span of a couple of months. In July, the Texas Stock Exchange opens up, and I think the first IPOs are slated to hit in 2027. This is exciting times.
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A
I mean, I don't know how they're going to kick this off. If they're going to have a bunch of cannons or everyone bring their six shooter and they're going to be shooting some fake bullets off. When they, when they kick this off, I don't know that we'll be ringing a bell. We might be firing a cannon.
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C
That'd be awesome.
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A
And listen, like, I'm, I'm about as big of a Dallas, Fort Worth, Texas cheerleader as you can be. I don't want to get ahead of ourselves. I mean, there's been several articles out there saying Dallas is aiming to steal New York's financial crown. I think we still have some, some work to do to get there. But if you're, if you're a denier and you think that New York has a monopoly, I think you're going to be sorely mistaken because there are some really big names and some really big firms that are going to plant some deep roots here because of this.
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C
Yeah, I mean, I think if we learned anything from what was it? Die Hard 3 is that we need more diversification in our financial markets. Well, nestled between the towers claimed by bank of America, JP Morgan and Goldman Sachs, we have cordoned off 800,000 square feet for the new Dallas campus that's able to host more than 5,000 staff. But the $700 million project is more than a regional expansion by one of America's largest banks. It's another win for lobbyists behind Dallas's Yall street, the Texan city's aggressive push to steal New York's financial crown. The Dallas Fort Worth or DFW metro area, once a fly in, fly out stopover for bankers, has seen its financial workforce boom over the past decade surging 40% to 386,000. Staff bankers and investment houses already keen to sidle up to Texas's fossil fuel industry and growing tech and AI sectors have been lured by multimillion dollar subsidies and new fast track business courts as well as Texas complete lack of a corporation or inc. So there's a lot of things, a lot of momentum here to believe that we're going to continue to see some huge financial wins centered right in middle America.
- [36:05]
A
Listen, you can pretty much get anywhere in the US on a 3 1/2, 4 hour flight from DFW and they probably have more direct flights out of DFW than they do anywhere else with the exception of maybe Atlanta. And you start talking about $700 million projects. I mean, there's many of those projects underway right now. And with the financial services sector, you know, really expanding, they got to have a place to, to work. And so Dallas is one of those markets where right now you're actually seeing a large number more than a few high rise office buildings being built. I mean, it's kind of an anomaly given where we are with offices nationally, that in certain segments of the, of the Dallas market you're seeing substantial office construction taking place. And so I'm very bullish on this. I mean, we released a podcast this week with our friends from JLL talking about why office is an investable asset class now and where generational wealth is going to be made. If you, if you're actively engaging in office acquisition at this point, if you look at, you know, you mentioned a couple of the other things here, Steven, the subsidies for Texas, for those that aren't from Texas, we actually have a legislature that has funds set up to lure companies here from an economic development perspective. Not to mention the local enticements or subsidies where there's tax abatements, other things that the municipalities provide, and the no state income tax. Huge win if you're looking at overall employee quality of life. It's tough to beat in the Texas markets. I mean, people say, well, it's really hot in the summer, but I think it's like 90 degrees in New York today and it's only 79 degrees here. And we have really good air conditioning. So you know, you deal with the summer, swim in your pool, hang out, get a nice tan and keep almost all the money you make and have affordable housing. So I think everyone on this podcast crew should consider Coming down to the dfw, giving us a. Giving us a shout out.
- [38:12]
B
He's trying to sell us Steven.
- [38:15]
C
I know, I know.
- [38:17]
B
I will visit Lonnie, but I will be a Long Island New Yorker forever. Sounds great, though.
- [38:25]
A
It's pretty awesome. But I will say, I mean, look, I get the best of both because I get to be in Manhattan quite a bit, but I'm not there enough to have to pay any of the taxes and get to live in Texas where, you know, listen, it's business friendly. And yeah, maybe I have to do a podcast recording in my cowboy hat. And when the y' all street opens, we'll have to go do a boots on the ground segment.
- [38:49]
C
Yeah, you said like, it's that the heat, the humidity, it's. It can be extreme, but it's tolerable. Now. We're not talking Houston here. Houston, I mean, for crying out loud, they have to pave using concrete instead of asphalt because the asphalt will melt in the summer. It's that rough.
- [39:08]
A
Listen, I offended some folks in Houston the last time we talked about this when I said that you sweat in the shower and you sweat in your car with the air conditioner on full blast. Houston is a great city. It has a lot of cultural aspects, great restaurants, great arts, museums, sports teams. Really great place. You couldn't pay me enough to live there. I can't deal with the humidity, man. Just not going to be sweating in my own house in the shower. Not going to happen.
- [39:40]
C
Yeah, you got to have some grit. But the food and I've eaten out there a little bit, but I haven't experienced the full scene. So the next time I go to Houston, I'm going to have to ask for recommendations because I've been told time and time again the food scene in Houston is amazing.
- [39:57]
A
Well, Houston has like three or four downtowns, so all kinds of things to do. But if you come down here, we're gonna have to call it H Town. The Rockets are actually in the playoffs right now. So the Mavericks didn't make it. The spurs are in. So Texas gets to root for either the spurs or the Rockets and the in the NBA playoffs. So I'm. I'm team H Town hoping they can win a couple series.
- [40:23]
B
So I want to get into some more commercial real estate headlines that we've been watching. There was an announcement recently that Fortress Investment Group has launched a new 1031 Exchange investment platform. And on a similar topic, we saw that CBRE has announced that it arranged a $26.2 million purchase of two medical office assets through a 1031 exchange. So maybe you guys can walk us through these two stories and then I think we need to take a step back and explain exactly what a 1031 exchange is.
- [40:57]
C
Yes, this first one, the Fortress Investment group launching a 1031 real estate exchange investment platform, I think is really interesting and just highlights the strength, the benefits, the demand for capabilities in this arena. So Fortress Investment Group announced the launch of a new exchange and is specifically targeting. Targeting 1031 exchanges. The platform is designed to provide advisors and their clients with access to institutional quality real estate investments through Delaware statutory trusts or DSTs. Fortress Real estate Exchange is designed to leverage the full capabilities of Fortress Investment Group's real estate platform, including their experience garnered from more than 20 years of real estate investments totaling over 29 billion. The platform will initially target investments in senior housing, student housing and multifamily properties, sectors in which Fortress has deep experience and operating experience specifically. And then the second one, SSP Investments completed a $26.2 million purchase of two medical office assets in Phoenix, Arizona and San Rafael, California. CBRE's Nick Whitstone and Andrew Trelo represented SSP Investments, a Bay area based family office acquisitions. To quote them here, they say these acquisitions represent a disciplined approach to expanding our family office footprint in the medical office sector. By securing assets with CreditWorthy tenants like SimonMed and Kaiser Permanente, we are ensuring stability and operational excellence for our investment platform for years to come. SSP Investments acquired 8921 West Thomas Road in Phoenix, Arizona for 17 million. The 42,000 square foot medical office building is 100% leased to Simon Med Imaging, the nation's largest outpatient physician radiology group. The building is located across from Banner estella Medical Center, a 317 bed hospital serving nearly 400,000 residents within a five mile radius. So Lonnie, I think we should unpack exactly what a 1031 exchange is.
- [43:11]
A
I think that's a great idea. Before you get into that though, I just wanted to comment on the Fortress 29 billion. I mean, it is amazing when we read these stories and we just see the capabilities that some of these firms have and the reach the aum, the number of properties they touch. It's just really crazy. The reach that they have and Fortress, I mean, obviously they kind of, they're a standard. And so for them to open up a 1031 exchange platform I think is really, really cool. But I think for our listeners, we've talked about this at some level, but mostly from a Political context of are the newly elected officials going to try to get rid of the 1031? We haven't really done, to my knowledge, a deep dive 101 on the 1031. So let's jump into it.
- [43:59]
C
Yes, a 1031 exchange, named after section 1031 of the internal Revenue Code is essentially a mechanism that lets a real estate investor sell a property and defer the capital gains tax on that sale as long as they roll the proceeds into another like kind property. That's why you oftentimes hear 1031 exchanges called, quote, a like kind exchange. And I want to emphasize the word defer here because that's the key. You're not eliminating the tax, you're kicking the can down the road. But in real estate, kicking the can is a strategy, not a weakness. So how does this actually work? Let's say you own a multifamily property, you bought it for 5 million, and it's now worth 10. If you sell it outright, you're looking at capital gains on that 5 million in appreciation plus depreciation recapture, which is another entirely different conversation. So with a like kind or 1031 exchange, you take all of those proceeds, identify a replacement property within 45 days of the sale, and and close on that replacement within 180 days. Now, if you do that, you don't touch any of the funds. You have to basically make sure you stay very strict to the letter of the law here. But if you do that, the IRS says, fine, we'll collect your capital gains tax later. Now, a few things that trip people up. First, like kind is broader than what most people think. You don't have to swap a multifamily for a multifamily property. You could sell a retail strip center and buy an industrial warehouse. As long as both properties are held for investment or business use, you're generally good. Now, what you can't do is exchange into your personal residence or a property you're flipping. So second, and this is where it gets operationally tricky, you can't touch the money. I just alluded to that. The proceeds have to go through a qualified intermediary. The moment you take constructive receipt of those funds, the exchange is blown and the tax bill comes due. So this is what can really land you in a nasty situation with the irs. Again, if you're not following the letter of the law exactly, and it looks like any of those funds leaked to the outside, you're going to face a tax bill. So third, why does this matter for the broader CRE market 1031, exchange volume is actually a meaningful demand driver, especially in the private capital and middle market space. When exchange activity dries up, whether because of rate uncertainty or just a few sellers are willing to transact, it reduces a meaningful source of acquisition capital. So when we talk about transaction volume being down, some portion of that is 1031 buyers sitting on the sidelines because they can't find replacement properties that pencil at today's rates. It's one of those quiet structural forces in the market that doesn't get enough attention, but it absolutely moves the needle.
- [46:58]
A
Yeah, and it provides other economic benefits downstream because it, you know, when you buy a building, you usually renovate it or you add some value or you finish out some of the space. And so you're hiring local contractors and you're doing things that generate jobs for those local markets. So there's definitely a very solid argument for why 1031 is such an integral part of the CRE ecosystem. You know, I think the qualified intermediary is a part that people a lot of times miss. They think, oh, if I just don't touch the money? Well, no, you literally can't touch the money. Like it needs to be held in escrow effectively with what they call a QI or a qualified intermediary. And then the timing component adds some nuance to this too, because you have to identify, as you mentioned, in the first 45 days, if you don't do that, then it triggers your inability to move forward. Then, you know, and it's not like you're gonna be able to identify 20 properties. I think there's like three property or something. It's been a while since I've looked at the details there, but it's a small number of properties you identify and then you have to transact. So that's why some people would argue from an investor perspective, 1031 is not a great deal. Yeah, you defer the capital gains. However, you pay a premium to acquire the new asset because you are under some form of duress. This instance, mostly time driven. So there's some nuance to this. Now, what's really interesting, Stephen and I think we could probably have someone on as a guest to maybe talk through this, maybe our friend Barrett Lindbergh that does the opportunity zone. Investing is opportunity zones effectively allow the same type of taking of capital gains and reinvesting, except at the end of the hold period. I think it's a 10 year period. If you have your capital gains invested in opportunity opportunity zone at 10 years, there are no taxes. Beautiful so it would be very interesting just to kind of see. You know, obviously the first couple of years after the opportunity zones were rolled out, there was a slow trickle of development projects and other things because people didn't fully understand. But now that people have executed on these, if you've seen, you know, a material pullback in some of the 1031 and maybe more funds shifted towards the opportunity zone development. Yeah.
- [49:13]
C
I mean, the part that always kills me in this discussion of 1031s is it seems like every election cycle when the budget talks come up and discussions about how do we raise tax revenue receipts, inevitably somebody says, well, let's get rid of the 1031 exchange. That's just fattening up the fat cats more. Well, if you think about this in the broader context, 1031 exchanges are critically important to our large real estate machine and it's very expensive and difficult to transact. So when we maximize reinvestment proceeds, that's essentially maximizing the economic productivity and importantly, it's allowing investors to rotate. If you got rid of 1031 exchanges, I think you would be doing. It's really hard to measure this, but you would be doing dramatic harm to the real estate and specifically commercial real estate sectors because you would basically destroy a massive amount of transaction volume. You destroy a massive portion of portfolio turnover and it's just not worth it. It's not worth it. I understand at some level the appeal of these folks are saying, if we get rid of the 1031 exchanges, here's how much tax revenue we'll raise. But the silly part of this is, yes, but how much less transaction volume will you see? And I bet it's, it's going to offset or potentially more than offset that tax revenue increase.
- [50:39]
A
Yeah, for sure. People won't trade out if they don't have to. And you know what's interesting is a lot of the 1031 exchange have taken place where someone's sold an apartment and gotten into a single tenant, you know, triple net lease type of opportunity. And so, you know, this has taken a little bit of a beating over the last couple of years with CVS, Walgreens troubles, etc. I just saw today that Seven Eleven has announced that they're going to be closing 645 locations. So another, you know, sometimes preferred option for 1031 buyers is to go buy one of these convenience stores. And you think that there's limited downside and it's mailbox money, you know, in quotes. Mailbox money. And when you find out that Your tenant is closing up shop, it really puts some downward pressure because those assets usually don't have an immediate viable secondary use. And so, you know, 1031 is great for the reasons you mentioned. If you're an investor, you have to do your homework because there are some nuances and the construct of just taking your money from a multi tenant facility and investing in a single net lease deal doesn't definitionally mean that you're going to have a better outcome.
- [51:57]
B
So let's turn over to our deals and data property type stories of the week. Let's start on the topic of data centers. There were a lot of headlines this week that Blackstone has plotted its debut of a data center reit. So walk us through the news and how much money this could raise to purchase data centers.
- [52:18]
A
Yeah, so Stephen, I was a little bit jealous on the intro when you were throwing out those trading acronyms or deal acronyms. So I'm going to come back to you here with the bxdc. This is the Blackstone Data center fund that they've set up. They filed all of the required documentation with the SEC and it's going to trade under the ticker. As I mentioned, bxdc. It's going to target stabilized, newly constructed data centers. Consensus is IPO could raise 2 billion to purchase data centers. Blackstone's approach sovereign wealth funds and other institutions for the initial investment. That's according to Bloomberg. Back in February, Blackstone was exploring the public data center fund that ultimately aims to raise tens of billions of dollars from large corporate and retail investors alike. So I think this is really good news for Blackstone. I mean, obviously they've been somewhat involved with data center, but now they're going to be all in on this. And I don't know if you're someone that's been dabbling in the data center space. Once Blackstone enters, it's a very fierce competitor. So I don't know what your thoughts are on this.
- [53:24]
C
I mean, it was just a matter of time, really. Truly it is. We kind of been focused purely on initially data centers getting built out of cash on hands. Then it moved to debt markets, now opening up the equity markets. This was the natural evolution in the space. So, so I'm excited to see how this IPO goes because, gosh, I mean, just a couple of weeks ago it sounded like IPOs in general were kind of on tenuous ground being put on hold or that the timing was being reconsidered. So again, this is another fantastic sign of liquidity and just risk demand in markets. So we'll be watching very closely at how the pricing comes off on this deal.
- [54:07]
B
So let's move on to the office market. We have a trading alert from our Tripwire newsletter here that a large Chicago office property value has been slashed even further below the loan balance.
- [54:21]
C
Yes, according to our updated April Data here, the $536 million A on center loan was recently reappraised at a 20% reduction and the collateral value now sits further below the outstanding loan balance. The asset was appraised at $824 million at securitization in 2018, and its value was first reduced below the outstanding loan balance in May of 2023 when it appraised at $414 million. The most recent appraisal, issued in September of 2025, but was just reported this past month, valued the property at 330.5 million. Now, we last mentioned this loan in a March 2026 edition of TruckWire when it transferred to Special Servicing for imminent monetary default after the borrower failed to make a required $2.5 million TILC reserve payment per amended loan terms. Additionally, although the note remains paid as agreed, the borrower also indicated it will be unable to retire the debts at its July 2026 maturity date and is seeking lender assistance. So we'll have more to come on this one. The loan collateral is a 2.8 million square foot urban office property in downtown Chicago. The property was built in 1972 and renovated in 2018. The top tenants include AON Service Corporation as well as KPMG, JLL and Kraft Foods, who occupy 9, 8, 7 and 6% respectively, on rentable space with leases that run through year end 2031, August 2029, May 2023 and July 2033 respectively. So in a nutshell, you have tenants that occupy high single digits with leases that run through, generally speaking, 2030 or early2030s. For the first three quarters of 2025, the loan posted a DSCR based on net cash flow of 1.18 times with occupancy of 66%.
- [56:17]
A
This is one of those buildings, Steven, where it looks terrible right now and it is 66% occupancy with value significantly below the loan balance at this point. But I got to think like if you can acquire this asset at something close to that or maybe a little bit less, prospects look pretty good here. I mean, downtown Chicago has been really challenged in the office sector, but if you look forward five to 10 years, again, like we've said, I'm not betting against Chicago, I'm not betting against la, I'm not betting against San Francisco. You know, this property, when it was valued at 824 million, nobody thought twice about that. Value of 2018 fell in line. So if you could acquire this asset in that $300 million range, prospects look pretty good for being able to reposition this and turn this back into something that's a stable, well performing office building.
- [57:08]
C
Now one thing I was talking with a student about this past week, we were on the topic of the retail apocalypse and some of these smaller format malls. We're talking like 400 to 800,000 square foot that were like 30 to 60% occupied, purchased at a super low basis, like 5 to 15 million and they just kind of cash flow. I think this goes back to the Namdar Realty. They've done a fantastic job in hitting, I'm guessing probably 20% plus IRR on some of these assets because they're getting them at such a low basis. Are we going to see something similar happen for a lot of these office properties? They're going to trade at 70 to 80% value reduction. We're going to see these large properties basically just chug along at 40 to 60% occupancy. But because they're at a super low basis. Or do you think the strategy will be for some of these truly to try and get them back to like 80% plus occupancy?
- [58:05]
A
Yeah, I mean, I think you're going to see a hybrid approach. I think for some of these markets that are not top tier long term markets, the play will be buy them at a really cheap basis and operate them in cash flow just like Namdar does in the mall space. But for markets like Chicago, Louisiana, San Fran, I think the upside is too great. People will go in and put capital in because look, Chicago is an interesting market in the sense that it's just been really hammered with kind of life safety, quality of life, crime issues, similar to what we saw in San Francisco. But what we've seen there is you get some elected officials that come in and clean that up, even if it's just nominally better and people come back and Chicago has too many things to offer downtown. I mean it's a top five city in my opinion in terms of the downtown, you know, aura that it has. It's, it's a really great place, great tenants, great shopping, great food, great scenery. They just have to get some of that external stuff fixed. And once they do, I think you'll see that market come back with A vengeance because it's a top tier city. And so I think in that market you'll see people actually put the money back to work and you'll see them trying to come back with renovated, rent driving type of improvements that hopefully get these buildings back to shape.
- [59:26]
C
Now let's turn over to a transaction we just recently saw in Midtown. Sovereign Partners in Hudson Point Capital. They're going to buy 575 Fifth Avenue for roughly 385 million. So this is the 40 story Midtown skyscraper, 575 Fifth Avenue. And savant Partners and Hudson Capital are buying this from Beacon Capital Partners and MetLife. This news coming to us from Commercial Observer. Will Silverman and Gary Phillips at Eastile had been marketing the 544,000 square foot office building on the corner of East 47th street and Fifth Avenue with a target price of at least $400 million. The exact purchase price could not be learned, but it's believed to be closer to 385 million that MetLife had paid to developer Fred Wilpen's Sterling equities for the property in 2005. According to sources close to the deal, the building was later divided into four condominium units in 2008. In 2015, MetLife sold a 50% stake to Beacon. The property's office portion, called Unit A, was reconfigured in 2015 to cover roughly 90% of the entire building, or around 504,000 square feet. Meanwhile, the retail units were also adjusted to account for roughly 40,000 square feet. Estill, which was recently acquired by Savills in a $1.1 billion deal, was initially hired to sell the building in 2022 without the retail space, but to no success. That's why the tower is now being sold along with the 40,000 square feet of retail space.
- [61:00]
A
Yeah, I think that's an interesting nuance here. The retail space on 5th Ave. Is a nice sweetener if you're buying it without the retails. Way less attractive. But I think throwing that retail component in, especially at 40,000 square foot makes this a much more viable purchase opportunity.
- [61:17]
C
Well, absolutely. That is a prime retail corridor right there.
- [61:21]
B
Okay, so let's go back to Texas and look at the retail market. We had a trading alert this week. A Lubbock, Texas mall property value has been slashed below the loan balance following a loan extension.
- [61:35]
C
Yes, April remittance data indicated that the collateral backing the $200 million South Plains Mall loan was recently reappraised at a 69% reduction and the collateral value now sits below the outstanding loan balance. The portfolio was appraised at $368 million at securitization in 2015, and this most recent appraisal cut the value to 114 million. We mentioned this loan in Trupwire in November 2025 when it transferred to Special servicing for eminence, balloon maturity, default, a forbearance and loan modification closed in February of 2026, extending the loan's maturity to November of 2029 and implementing updated terms including a fresh equity contribution and the release of a former anchor box portion of the collateral. Special Servicer commentary reports that the loan will remain cash managed and is considered to be in a rehab period. The loan collateral is a nearly 1.25 million square foot super regional mall in Lubbock, Texas. The property was constructed in 1972 and renovated in 2015 following the forthcoming collateral release. Top tenants will include JCPenney and Home Depot, whose leases count for 21% and 10% of rentable area and run through March of 28 and the end of 2040. Financials for the full year 2025 show that the loan posted a DSCR based on net cash flow of 1.98 times. Now this is an interesting asset. I mean, I know where the Home Depot sits relative to this property and I wouldn't call that one of the major anchors. I mean, Dillard's really was like one of the main pulls here. You also have a number of, I would say, like, you know, really appealing restaurant tenants that almost act like anchors for this, this property. And keep in mind Lubbock is about five hours from any other like major msa. And so when you call this a super regional draw, it's no joke. Like people will drive two hours to get to this mall because it's the closest mall now. Fun little fact here, Lonnie. After the securitization market, or I should say when the securitization market got restarted after the 2008 crisis, the very first deal issued in 2010, the largest loan and that first post GFC deal was the South Plains Mall.
- [63:51]
A
Yeah, this is, this is an interesting one. We've, we've been tracking this as you mentioned for a while. I think we mentioned this when they were attempting to close the modification back in February. And you know, I'm with you. If you're a super regional mall, I don't think you want to be touting that Home Depot is your second largest anchor tenant because that just highlights where it's at. I'm with you. I think there's some other more appealing tenants here that, that are act as a draw. Home Depot is not synonymous with super regional mall activity. But yeah, look, this is an interesting property just because of the dynamics that you mentioned. It's. It's one of one in a market that, you know, there's no competition. People have to go there. It was renovated about 10 or 11 years ago. It's probably due for some updating now and hopefully they'll be able to, you know, reposition some of these tenants and backfill some space and turn this into a much more vibrant shopping experience. But yeah, they have some inherent competitive advantages because of where they're located at.
- [64:57]
C
Yeah, I mean, to me, this is a no brainer asset. It's a staple. Fantastic location relative to transportation infrastructure. You know, good ingress, egress. Yeah, it just needs probably a little bit more reconfiguration. But you know, long term, very viable asset.
- [65:17]
A
Yeah, I agree. I will say though that they've. They've definitely with all of the other retail development in Lubbock, it definitely has put some downward pressure on the asset. So when this was built and even as recently as maybe 10 years ago, this was the retail outlet for people in Lubbock. And as you know very well, I mean, they've exploded with, you know, new retail developments. I mean, Lubbock has really grown significantly. The college has enrollment now that has exploded with nil and everything that's happening there. And Cody Campbell's involvement, like Lubbock has become the hot place. And. Which is kind of funny to say out loud, but it's true. And there's been a lot of capital flowing into retail development outside of the mall, the traditional retail here. So I'm with you. I think this is still a mainstay. It's a staple, but there's definitely increased competition. Not at a mall to mall level, obviously, but some of these new retailers that are popping up are definitely probably located a little closer to the rooftops than this is.
- [66:21]
C
Yeah, I think if you were to add one, probably two large experiential retail tenants in here. So one of them that I'm thinking of, because you have a big box space that is just kind of lingering, you reconfigure it for Andretti speed like go kart racing, indoor electric go kart racing. That changes the foot traffic game of this mall.
- [66:43]
A
Yeah, I agree with you. Just thankful you didn't say pickleball.
- [66:48]
C
No, no, I'm talking racing.
- [66:51]
B
Okay, I'll close here with one other story that caught my eye this week. Have you guys seen WeWork's latest announcement for their WeWork Go, which is the on the go office pod concept?
- [67:04]
C
Yeah, I kind of want to get one of these dropped off in my driveway, quite honestly. You know, I know right now they're targeting airports and places like, but you know if they could just offer an at home service they would crush. It probably doesn't make sense from transportation cost and just business strategy point of view, but still, I like this idea so co working giant WeWork launched its first new product since filing for bankruptcy in 2023. WeWork Go will place private office pods in busy settings and dynamic destinations like airport terminals, hotel lobbies and convention centers, WeWork announced Monday. The company said WeWork Go will help it respond to the structural shift in how businesses use real estate. WeWork Go has three types of pods, a single user format, a multi user pod for up to four people, and an Americans with Disabilities act compatible pod. Users can book directly at the WeWork Go pods at flexible rates that vary by location and session length, according to the announcement. The concept debuts this week at the 2026 SEM4 World Economic Summit in Washington, DC. When asked for more information about the about how the WeWork Go locations will be chosen, a spokesperson for the company told BizNow that the company will thoughtfully and opportunistically target high traffic locations with growing demand for private, easily accessible space.
- [68:28]
A
Well, when I saw this online I thought that's a pretty cool concept. But I think, and I think it will be successful because listen, like, as you guys know, I travel quite a bit and people are hosting meetings. I've done this in the airport lounges, wherever you can find space, and that's not very conducive to being productive. If I could go rent a small pod for 30 minutes and do a call, that's a much better working environment. The part that's just a little weird here is just how gross these things will get. You know, like at least if you're renting a WeWork space in an office building, they have someone that's coming through on a regular basis and cleaning it and you feel like it's decent. But remember phone booths back in the day? Those things were disgusting and I think this would probably have a similar fate. So if I could fit one of these in a backpack to go with my office on the go, I would be be all for it. I think we'll see these pop up in some hotels and airports as I mentioned. I think it'll take some Time though, to get widespread adoption. It's a good idea for WeWork. I mean, listen, I think they need to continue to innovate. And as we had John Santora on our podcast a few months ago, he definitely bringing a much more pragmatic but, but innovative kind of approach to what they're doing. And this is one where, you know, it is innovative in the sense that nobody's doing this, but it makes sense for WeWork because this is what they specialize in. They already have the infrastructure to allow people to lease them on the go, etc. Etc. So I'm hopeful for them that this proves to be a viable option.
- [69:58]
C
Yeah, I mean, one of the biggest frustrations for like so many traveling sales folks and business folks is when you're at a conference and you still have to get regular work done, you don't have any space to do it and oftentimes you really don't want to go back to your hotel room. I mean, it's not really. It's better, but it's not great. So if this helps plug that gap, I think it's, it's a home run. It's just a matter of, like you said, kind of adoption and how it gets woven into the business environment, how quickly.
- [70:27]
B
So yes, as Lonnie mentioned, we did have WeWork CEO John Santora on the podcast. We've had a lot of really cool and really interesting guests over the past few years and months. So check out our guest podcasts on Spotify or Apple or wherever else you listen. And if you like what the guest has to say, reach out to them and tell them that you TREP sent you. Or if you have a guest in mind, send it our way. We'd love to talk to you or talk to someone from your firm. So while I'm giving some programming notes, I'll share a few more here. Of course, I have to mention Trep Connect in New York City, our annual conference. This is our CRE and Capital Markets Forum that is taking place May 6th and 7th in Rockefeller Center. At the time of this recording, we're about 20 days away, which is crazy. We have such an exciting lineup of speakers panels, networking receptions. We have a really cool, exclusive casino night that you can join and meet all the attendees and the speakers that are joining us. I want to run through some of our speakers really quick. We have a lot, but you will hear some really exciting names and firms on this list. And if you haven't gotten your ticket yet, there's still time to do so reach out to us. We'd love to make it work for you or your team to join us. Speaking this year, we have leaders from rxr, Trimont, Manulife, Prime Finance, Madison Realty Capital, Blackrock, Tanger, Marcus and Millichap, Hodes, Wheel and Associates, Stifel, Derby Lane, Newmark, BMO Capital Markets, Oxford Economics, Cushman and Wakefield, Byline Bank, First Financial Network, the Federal Reserve bank of New York, ambridge Hospitality, Voya, JLL, PwC, Burcadia, Houlihan, Loki and Academy securities. Such a great lineup of speakers. Reach out to us podcastrep.com we're so excited to meet so many of you there and host everyone, so still time to sign up for that. We also have our Marketplace webinar coming up this month. Thursday, April 30th at 2pm Eastern. Stephen and Lonnie will be talking about CMBS Maturity Outcomes, an overview of retail, and digging into geopolitical risk and the impact on commercial real estate. So check out our Marketplace webinar. You can find that on our LinkedIn, our X page, our website, or reach out to us@podcastrepp.com and turning to Shout outs. Jake C loves the podcast and listens to it every week and was thinking about coming to TripConnect so we can't wait to see you there. Sang K reached out to us and said they're a big fan of the podcast and was looking to have us come speak at their Real Estate Appraisal Review meeting. So we're excited to find some time and make sure we can come and talk to your real estate credit team and share our insights with your group. That's something that our experts do across the country. If you have an internal meeting or an external meeting and you're looking for some trip data in the room or some insights from our our experts Lonnie, Steven and so many other people on our staff reach out to us. We'd love to work that out with you and come visit your offices. Alex R. Loves the podcast and said it has become their Monday routine. Emily B. Asked to be signed up for the latest webinar. Scott B. Caught our old podcast episode with Samir Tejpal and said he's looking forward to hearing him speak again at Trep Connect. Tommy P. Is a big fan of the POD and is interested in some of our AI offerings and Peyton L is finalizing their travel plans to come to New York next month and loves the podcast and can't wait to meet us in person. We also heard from Slater L. Who said he's made it part of his everyday morning routine to listen to the podcast on his drive into work, and he can confidently say that our show is a big part of the reason that he knows what he knows now about commercial real estate. So we're really excited you reached doubts later and looking forward to hosting you at Trep Connect. We also heard from Jonathan F. Who is looking forward to seeing us at Trep Connect and he said he's an avid listener of our podcast. My Long Island Railroad rides are never boring thanks to our team. So thank you to everyone for always reaching out sharing our podcast on social media. As a reminder, leave the podcast a five star review on Spotify Apple. Give it a comment and we will see you next week. So with that we'll close. Thanks to our producer Mariana Sobrana. Join us next 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, send an email to podcastruck.com and subscribe to the Tripwire podcast with your favorite provider. Thank you for listening and stay well.
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A
All right.