Peebles on Expanding Opportunities to Create Wealth

a multibillion dollar portfolio. They've got projects in New York, Philly, Boston, d c, um Miammi, San Francisco, also l A. He also served on the National Finance Committee Committee excuse me a President Obama and has really done a lot, he joins us on the phone in Coral Gables, Florida. Done so nice to have you here with us. Welcome to Bloomberg Radio. Thank you, good to be here. There's so many, so many different places I know Jason and I want to go. I do want to start with though your

vattage point. In the real estate industry, UM one has certainly felt the impact of the pandemic. We've had a lot of conversations about how real estate uses and demands may change as a result of the crisis. What is the impact from what you see the longer term maybe short term and longer term impacts. Well, short short term impact, I think we're seeing it now. There's been a more of an exodus out of the cities UM and more

so into the suburban markets. And then UM more people are relocating to places like Florida for example, UH in preparation for the winner. But I think that you'll see UM and a greater UM you know, stabilization as we get through this winter. I mean, the cities are not dead New York City, while you know it's it's limited occupancy right now in terms of office space, UM. Most

restaurants are closed, in other businesses are closed. UM. So there is a a short term decline because tennis are able to pay their rent and the office tenants who generate a lot of activity and the marketplace the office workers are not there either. But I think that short term UM, I do think that the UM pandemic has structurally changed how we will consume office space as we

go forward. I think that companies around the country and around the globe, especially here in the US are reevaluating how they deal with placing their employees, how much they're going to rely upon remote working, which has proven for the typical office workers to be much more effective than UM most companies thought. And so I think that that will be a structural shift in UM. The officis long term. I think that UM most retail UM has changed forever.

But that was a pre pandemic technology. It had disrupted retail considerably. And so when you think about sort of the reorganized zation, the rethinking of offices done, you know, what does that mean? Does does the pricing change? Does the relationship between the owner and the tenant change? Does what gets developed change? I just wonder sort of thinking through the mechanics and and sort of playing that out what it looks like. Well, I think that, first of all,

I think that's the easy one. Is what gets developed definitely changes. It will what gets developed going forward will change in terms of how the office space will be configured going forward, and how protocols will be put in place, UH, in terms of how people enter buildings, how we let people entering the buildings, in terms of health and UH and even once this pandemic is behind us, Uh, the new buildings will be better designed and better built to

address a future a potential pandemic as well. I think also the close proximity of coworking and how most companies were shifting towards over the floor plants. I think that changes. Isn't that kind of sorry to interrupt you, but isn't that kind of amazing because that really felt like something And listen, you know us, I mean, you know Bloomberg, like we were all about the open We still large it to a large extent because nobody's really here, But I mean that seemed like a trend that was just

going into going into the future, un unabated in many ways. Yeah, I mean Bloomberg was very innovative. When you all built your your officers um um um and on the East Side and the old Alexander site. What happened there is you all created a almost a live and work environment to a degree because you've got the open cafeteria. Everything was open um, even the waiting areas and so forth where visitors were open, and your studios were pretty visible

and open as well. So I think that that configuration is going to change to some degree, especially um, how how people work at their desks. And also I think GONEA is going to be the days, even with the law firms and the like, where each individual has their own office for this specific workspace. I think that that will change because you'll see a lot more remote working and also those who travel to other locations will not

need a fixed office. So I think the fixed office um UH or fifth fixed workspace has changed, will change. And I think also you'll see more collaborative spaces that have some form of social distancing potential and for the immediate use, you'll see that in place now. I mean but you, I mean you can really you can see that across the board. I happen to be, by the way, I'm not implored. I happen to be in zach Harbor.

But I'm in Manhattan last week, and and and and what you're seeing in in UM office spaces that are being utilized and very few people are there, and I think that's going to take a lot of time for people to come back, and and buildings are going to have to employers, they're gonna have to tell people by action UM that it's safe to come back. So done.

Let's talk about the wealth gap, because it has been a subject that we have I think taken much more seriously candidly over the past couple of months, as we've really started to I hope embrace this reckoning that we're seeing around racial inequality and being Bloomberg and Business Week, we follow the money and the wealth gap is vast. I don't have to tell you what do we do about it? Well, I think we've got to widen the opportunity.

I think that there's no talent is discriminated, distribintate and discriminately, and uh, you know, opportunity is discribuinated on a discriminatory basis,

and I don't. I think that we've got to look at expanding access to capital, expanding opportunities in every industry across the board, and be mindful that we as business owners and entrepreneurs and CEO have to take affirmative steps and providing fair access to career and economic opportunities to minorities and women because both are severely underrepresented in every

industry of any consequence in this country. You know, don the you know, our team here at Bloomberg did a story about Silicon Black Silicon Valley entrepreneurs venture capitalists and how they had reached certainly success in their lives and you know, in terms of Silicon Valley, but they were even having trouble being able to support other minority owned

businesses at their own firms. We're finding it difficult to get others to get on board with them, and so I wonder, what's the trick here, how do we interess Well, I think that we have to. I mean, my industry is one that I think is has an easy remedy to it. It's um. You know, the real estate development business is a low barrier to entry industry. You can start off from any perspective UM as an entrepreneur and

go into real estate development. Doesn't require any kind of license of specialized skill, requires some talent and access to capital. And the capital that funds real estated mainly through private equity and private equity. Biggest investors are public employee pension systems, and so for example, there's about seventy trillion dollars in venture capital and private equity right now, and about one point three percent of that money is deployed to businesses

owned or run by minority to women combined. And yet a significant portion of the contributors to the public pension systems of workers who whose money is being invested are minorities, and when me and so if we can have fair access to that capital, and those investors tell the allocators of capital that they want to see their capital deployed in a more diverse manner. Prudently by the way, but more diverse matter. Um, there is no shortage right now

of capital in the marketplace. There's a shortage of where to deploy the capital. That's why we're seeing this from the market reactive way. It is um and so I think the other aspects it's important is people have to understand we're not we don't in order to bring equality. It's not about redistributing wealth, redistributing opportunities. It just expanding it and expanding opportunities to create wealth. And so don

how do those institutional investors. I agree with everything you're saying, and you're echoing something that John Rodgers said on this program about the institutional investors and especially the public pension funds, which candidly they've gotten legion about some other issues. You know, sometimes it's around gun control and other things where they've essentially said, look, I'm not going to invest in certain sectors or I'm not going to invest in certain managers

unless they meet these certain criteria. E. S G has been an area, especially around the environment and climate where they've done that. Why haven't they done this yet in your estimation? Well, I think that in part because they are missing misinterpreting their role in studuciaries. I think that the idea to pick the most qualified, the best, and the least risky, it's got the firm that's been around longest.

And so if you're going to have an aversion to first, second, third time funds, then it's going to be very difficult for you to create an environment where there will be more minority and women manage funds. So they've got to be willing to um make strategic, prudent investments and utilizing a different criteria, one that doesn't say you were established firms.

And by the way, it's just as hard for a white male who starts off with no family money to go into this space also, right, So, because the system favors the established, larger firms and UH, and so I think they've got to change how that capital is deployed by how they evaluate where they're going to deploy with right, Well, we could talk to you all day. This is fascinating. As you can tell, we are pretty into this topic.

And and I couldn't agree with you more. I mean I have said on this program and elsewhere that you know, nobody had a public pension fund ever got fired for giving more money to Blackstone or KKR, Carlisle. I mean, it's just the system is built in a certain way and it needs to be rethought. John Peoples, thank you so much, Chairman and CEO of the People's Corporation joining us on the phone from Long Island. Really thoughtful, um

and constructive in many ways. And he's exactly right that the institutional money has to change.