Swig Waiting for World to Reopen

It was Friday the March, if you will. It was a very thoughtful conversation about kind of how our world was being impacted because of the virus. Little did we know. You're so right, Jason Ken Swig is back with us. He is president of Swig Equities, and he's on the phone from Bridge Hampton. And from what I understand, you drove in a little bit so you could get better sell service. So Kent, thank you so much, um for doing that. Tell us about your world and how you're

doing well. It's a pleasure to be back. And uh, my world is I think, like everybody else is a bit it seems more like a science fiction movie than it does a reality I'm listening to the radio and saying talking Bloomberg Radio says, Oh, the world, the United States economy is about to try to open again. I mean, I can't believe those kind of words are coming out of us. So I'm the same as everybody else. You know, I'm sipping sheltering in place and and uh, waiting for

the world to reopen. And so what's your read on that, Kent, Because you know you have interest all over the country east coast, west coast, places in between. You're talking to people all the time. I mean, what's your read on this kind of checkerboard that we seem to have in

terms of plans and aspirations to get this all going again. Well, the first thing I think we want to do is to make sure that everybody is healthy and safe, right, and the way to do that is through testing, similar to what we talked about last time I was with you. And so the critical component is is to try to get as many tests of our population as possible. Uh. And once we know and have knowledge, then we can start to begin to go back into the productive work schedules. Um.

Albeit differently, but we need to find information first. Yeah. You know. One of the things Kent that Jason and I've talked a lot about, um because of a Bloomberg story, but it's been in kind of our psyche. Uh, if you will is fear versus greed. Um. There's so much fear talking to Henry Cornell about uh. And I think actually the chairman was it of Jet Blue, you know

about people are afraid to come back to work. Um, and so you will ultimately initially ask people to come back to work, and until they know it's safe and secure, it's not going to happen. Um. And then at the same time, there's incredible pressure for companies to kind of get back to it. Uh, in order to survive. Well, let's put it, if you are a greedy person or a greedy company, um, then you're going to do things

that would be productive for you in business. And being productive in business means that you have to have people by your product. You have to have people working for you, and that all means having people. Would we just lose Kent, think, okay, we just lost Kent for a minute. We're gonna try and get him back. But um, you know it's interesting

to hear Kent talk about the real estate world. I was just looking at his story earlier, Carol, our friend Tom Barrick, we've talked to him before you about a year ago, I believe moderated panel that he had that he participated in milk and talking about real estate. You know, he told Eric Chatzker earlier today that the real estate market is in chaos. You've got laws waved on rent and debt, and I mean this is the lifeblood of this industry, you know, sort of the income and the

ability to borrow. Yeah. Absolutely. And the thing is, you know, we are learning each day that goes by. If people aren't paying their rent, um, aren't paying um these you know, our mortgages, you know, then it starts to work its way through the system because then financial firms that are doing the lending are getting impact. Right, it starts to work its way through the system. So you're right, he said,

we haven't had a crisis like this. We've never had one where we just have a government, um um taking a revenue. Is that right? We've never had one where we just have a government taking of revenue. Um. Let's go back to Kent. Swig president of SWIG Equities once again with us from Bridge Hampton. Hey, Ken, I'm glad you we were able to get you back. You were saying, you were talking about if you're a greedy person, and I'm assuming you know, um, you know you're gonna you're

gonna maybe do things you shouldn't do. Well, I'm saying even agreed now, it has the same motivations and everybody else is that they want an economy to be back, They want people to buy their product, and they want their workers to be working. So there's some I have a more narrow focus, some have a little bit broader focus. But nonetheless it's the same goals in mind, so that it doesn't work. If we open up too soon and have to close back, that's going to do more damage.

So I would say that greed doesn't play a role here as much as it is as as looking at a broad perspective and a proper perspective. So can in our little interregnum there we're when we're getting you back.

I was reading our listeners some comments that Tom Barrick made a well known figure to you, I'm sure, uh, colleague there in the in the real estate industry and he was, you know, sort of weighing in as I would love for you to weigh in on sort of this notion of rent forbearance and you know, essentially landlords saying no, you know, just just get me when you can or differ or whatever that is. How is that working and what's the right mix and balance there in

your estimation? Well, so let's take the government factor out for one moment and let's take a look at private enterprise. Um. So I'm a building owner on one of my companies, right, Um, my family has properties. I have properties, and you know, people laugh at me, my colleagues sometimes say, but basically I'm a tenant service provider. I am own owning. Buildings are meaningless. It's the people inside them that count. And those people are rent paying people. So if they can't

pay rent, were nowhere. Um. At the same time, if these companies don't have money to pay rent and go out of business, then you're really nowhere. So unfortunately, you know, our debt service, our utilities are real estate taxes need to be paid and we get that from rent. But if if so, we have to have a balance here.

So forgetting the government for a moment, we have to work with our tenants in some way, shape or form to make sure that they have viable companies because if they all go out, we're left with big, huge buildings that are empty and meaningless. Um. So you know, there is a balance there that we have to allow tenants to be able to get on their feet in some way. So one of the questions first people ask is you know, have you applied for any government grants? Have you have

you received anything? Because you know then you know what kind of shape they're in and what they can do, and you have to work with them. Um. But it's going to be a difficult with April what's going on, and May it's probably going to be worse because the people you May is going to be the worst hold that thought. We're going to continue this conversation in just a minute. Ken Swig is with as president of Swig Equities, joining us on the phone. A lot more to talk

about when it comes to real estate. Also want to talk to him a lot because about New York City, because it's a city he knows really, really well. And I do feel like no one would disagree with the idea that, at least in the short term, the city is going to be fundamentally changed, maybe more than the short term. So I want to pose that question to really right, but you know what life is like and we do come back. So we'll get his thoughts on

that in just a moment. We're going to continue our conversation now with Kent Swig, president of Swig Equities, joining us on the phone from Long Island. So, Kent, uh, he spent a lot of time in New York City. That's where we last saw you, as we mentioned at the top of the conversation there in Midtown. How does New York change out of this? Well, one thing that

New Yorkers are, if anything, is resilient. So we look back at the pandemic that existed in nineteen eighteen, you know where sixty million, sixty five million people passed away, I mean unbelievable amount. And then you look at what happened in America in nineteen twenties, right, you know, people were back, they were dancing, they were out. So this

is a horrendous, terrible thing, no doubt. At the same time, we've got you know, much more better, much better science, much more technology, and I think that will end up with a vaccine of sorts at least um and and a way to stabilize ourselves. And people will be back and they will be going out, but it will take a moment. Unlike other situations we've been in where people, you know, the situation ended and then people started going back into the regular routines, this isn't going to have

a you know, a five line that it ends. This is going to be a longer period of time where it's a slow comeback, but we will be back in New York is a very strong place and it's a capital city of the world. Um And, and it's a painful process, but we'll be better for it and will

be better prepared for it. How will we be better for it, Well, one thing is this we if you look at the federal government, you know, the basic element of the federal government is to protect the life, liberty, and health and safety of Americans, right and we look at this with four branches of the military. I think, frankly, what has happened in this administration is that we failed to look at the fifth branch of our secure system, which is a CDC, the Center of Disease Control UM.

The administration currently took the head person off of the National Security Council. We've cut back eight sixteen over the past two years, respectively, um from the CDC, and that's just can't happen. So where will we be better for it is that Americans will demand that the c d C and other organizations are a functioning major part of our civil defense and our national defense, and we will protect ourselves. You know, we're we're storing nuclear weapons, Lord forbid,

we never want to use them. We need to store ventilators that we hopefully never will need. But that doesn't mean we don't have them. So we have. We've caught ourselves unprepared for something like this because we let we didn't we let it go, or we didn't think about it. And it's a major leg of our defense. And I think we will be better for the future generations because we will understand that and will take the necessary precautions

to never let this happen again. Unprepared unpreparedness never happened again. Yea son, How does this change you as a business person? How does it change you as an investor? As someone who is you know you are ultimately, as you said earlier in the conversation, your your business is all about people, giving people places to be and to live and to work. How does it change the choices that you make in

the short and the midterm. Well, the short term is the safety and health of our workers and and and trying to get our companies to be safe secure so we can continue to employ all the people that we do. UM, our businesses are going to change. We're in you know, both residential and commercial. The way we live and work is going to change. The way we work is going

to change. Um. You know, if if buildings for cleaning once a week, apart me once a day, you know, their lobbies and elevators, etcetera, it's now going to be an hourly cleaning. It's not more. Um, there's gonna be a whole new way of looking at things. In in Manhattan, there was roughly three hundred square feet per person in an office building. Um. Today you know it brought down to about a hundred eighty square feet because we were able to have more open landscaping, packed people in more

dense communities, etcetera. That's going to change back the other way. So. UM. The other thing is that people will find that possibly you know you've got you don't have to go to work five days a week. You can work two days from home. Maybe. Um, So there will be a different way of structuring our jaw market. It's gonna have a whole new view. Smaller kitchens in Manhattan may not be the idea anymore because people may need to have a larger kitchen and be able to want to cook and

stay in. So I think it's going to have a lot of ramplications of the way we are. But our our ability to to go after life and live life and want all these great things, I don't think it's going to be diminished. I think it's going to be just refocused a little while. And so I do wonder you know this notion of especially from a residential perspective, Kent Weather and I say this sitting and talking to you in the suburbs, do we change the way we

think about cities and suburbs. You know for sure we're going to be looking at that, of course. Um. But again I think that if look, we all went through nine eleven, which was a horrendous thing, and people were nervous about New York City and and and living here in this but what we relied on was our national

government to take action and protect us. I think what the biggest problem right now is that our national government, in my opinion, sailed, and that failure is what makes people more nervous and more more susceptible to wanting for change. So that is going to be changed back because the population is not going to tolerate that kind of thing anymore, nor should they. And we're going to have in place mechanisms.

I don't know all of them, but certainly we're gonna have in place mechanism new protocols of how we conduct ourselves and how we live, and and we're going to have back up, and we're going to have ways to be able to to to you know, Lord forbid another kind of virus. It's like this, ways to be able to to fight it um. And that's what hasn't happened.

I think there were the Latin the fact that we were caught off guard and that we're not prepared and we weren't getting a steady, consistent message coming out of Washington, d C. That makes people reevaluate things, so I think they will. But all manly New Yorkers are it's a very exciting, wonderful place to be and I think it will continue to be that way. Well, we look forward to seeing you in person again a bookend of sorts. Nice to catch up with you in the interim, but

next time in the Bloomberg Interactor Broker studio. We hope, or I don't knows, maybe over a drink would be better, exactly all right? Ken Swigg, president of SWIG Equities, on the phone from Long Island. Always appreciate his time and his thoughtful insight.