A Tale of Two Cities Emerges In Commercial Real Estate

us site selection team. So has he been busy? My suspicion, as he'll say, yes, let's ask him directly. Tom Stringer joins us. Tom, thanks for joining. What's happening out there are companies still looking for sites, making plans, changing strategies. Well, first of all, good morning, Fanny, thanks for having me. It's great to be back. And yes, you are right,

we are busy. I mean, I think for the first two months of the pandemic, folks were in shutdown and wait and see mode and kind of a springtime turned into summer, the wheel to commerce luckily started turning again, certainly on on large Catholic investment projects, and you started

to see that. Obviously, today we have some great news in New York City with what Facebook announced with the Farley Post Office building taking a substantial block of space in the Central Business District, which I think is really probably great news for the brokerage communities across the country.

And in the last week or so, you've had some some major investments in manufacturing, certainly with Tesla and Nicolo with the groundbreaking on their factories and the automotive sector, so wheels are starting to move, which is great news. Is your client, we should we should mention exactly so. So Tom, you know, I guess the debate is still open about, you know, where people will work going forward. A lot of us, most of us, a lot of us are working from home right now, we have been

since March. Some folks unfortunately are unable to do that, and there are on on the front lines. But how is it the thought process evolving about how this is going to play out? Are we ever gonna go back to the office full force? It's a great an'swer, a great question. I think the answer to that is probably not. I think that any time you can take right the two biggest costs on corporate balance sheets or people, we all get that and then obviously real estates number two.

And anytime you can take your second leading cost and and maybe half it or reduce it by even as much as the third um, that's a huge difference. And it also takes an account of people like working at home to some degree. Some jobs people would certainly prefer to be back to the office. But that has really been injected into the thought process on the corporate real estate side that hey, we're going to have to tack a little bit here at you know, try to reconfigure

how we utilize space. Is it going to be that big open concept anymore? Will that work? Do we need a smaller footprint that's just going to be more hotel and meeting space and and let most people office out of their homes. So those discussions are really taking place, and I think we're probably going to see a reduction in overall office usage. But that's being picked up pretty

aggressively on the manufacturing and warehousing side right now. I mean, you can't find warehousing space really anywhere around the country in sizeable blocks anymore, which is is indicative of kind

of the rise of e commerce. Well, so you'd be in a great position to tell us are those all for server farms and for computers or the actual people that are Like, I'm fascinated by this for NATO stories seven square feet in the middle of New York City right by Pen I mean it is Penn Station basically, and uh, you know that's ten million square feet in total. But is Facebook going to move people into that building or is this another server farm? Yeah, no, that's a

good question. Um, we don't know what their internal plants are yet. Focus has really been on the block of space.

But given where it is, given the locality, given frankly, the utility rates and the costs of utilities in New York versus putting servers in in more cost effective jurisdictions or even upstate New York to take advantage of things like Niagara Mohawk power, the odds are that this is really going to be a people dominated facility, which is great news, but also are around the country there has been a lot of pick up really, as you point out,

in computer capacity in server farms coming online to handle just the demand of e commerce and the fact that really we're moving our infrastructure and architecture into the digital world as opposed to physical plan But it's also being picked up by warehouse I mean actual good old fashioned inventory as really unsexy as that is, companies are building that into their models now because the consumer markets are driving Hey, you need to have these types of prescriptions

on hand, these consumer products on hand, so that that kind of the death of the just in time inventory models really taking hold. Hey, Tom, you know, let's talk about New York City in particular. A couple of weeks ago, I came into the city for the first time since early March, and I was just shocked at the number of vacancies, commercial vacancies along blocks that I'm very familiar with where I know they were vibrant businesses just several months ago. Where are we in terms of kind of

commercial vacancies and maybe even rates um in New York City. Well, you asked a really good question, because even though office and we're housing an industrial may be doing very well, um certainly in the New York City marketplace right now,

and Facebook being a big help to that. The retail and street level retail is a big issue, and that's been an issue that's really been going on for two and three years prior to the pandemic with landlords just kind of holding out for higher price rents and small mom and pop type of shops and able to make it and make it just on a commercial lease standpoint

that couldn't afford the rent. This is, along with the lockdown and shutting them out of any revenue, has really been a significant problem for the city and it probably will be for the foreseeable future. Um. You know, the programs that have come out of the Federal Reserve, the p PP, the extensions of it right have been helpful, but but it doesn't replace real revenue. It doesn't replace real consumer demand. It's it's a band aid, um that that was designed to get us to right market demand

again that still has not come back yet. So I think you point out a really good issue that that retail and main street related issues for real estate not just in the cities, but in the suburbs. I mean that they're going through the same issues right now. That's a problem. That's a problem that economic development is going to have to deal with. That that legislatures at the both the federal, state local are going to have to deal with and we've never done that for that. Yeah,

it's interesting to see. It's gonna be a big turn on Tom as you're suggesting. Tom Stringer, Corporate real Estate Advisory Managing Director for accounting firm b DEO, giving us his thoughts on the commercial real estate business again. The big news in New York City was um Facebook taking a huge piece of commercial real estate, the Farley Building, which is right across street from Penn Station in Midtown Manhattan. Well.

Bloomberg Markets magazine is out with a special issue focused on diversity, where black men and women share their experience on Wall Street. Lauren Simmons is one of the contributors. She's the youngest black woman ever to work on the New York Stock Exchange and she joins us now, Lauren, thank you so much. We really appreciate it. Entrepreneur found their CEO of Lauren Simmons, We really appreciate you joining us here, Lauren, Wall Street. Why can't they seem to

make any steady progress at all on diversity? You know, I think it has to be an initiative that people want to care about. And if you have people sitting at the top that don't make this an importance, it's not going to be an importance. UM. I know that in two thousand and twenty these issues have been brought

up again. And once these issues are brought up, it's no reason to turn a blind light, like you should be going above and beyond to to do better and to be better and to have more diversity inclusion within your organization. But two thousand and twenties, since the first time that these issues have been brought up in seventeen, while I was still on the trading floor, it was the year of the Woman, and since up until we have made marginalized efforts, as you know, bringing more women

into this space, let alone bringing more minorities. So, Lauren, how long did you work on Wall Street and did you feel like there was any progress at all between arriving and leaving. I worked there for two years, and uh, there was one other lady who eventually joined the trading floor, and she was much older, had been on the trading floor, you know, back in the nineties, early two thousand and

and had came back. So from my experience, no, specifically to the New York Stock Exchange, No, I don't think there's been much improvement. So it's interesting, Lauren. You know, I've worked on Wall Street for about thirty years and what I noticed and this is probably has some relation to corporate America as well as the incoming classes, whether at a college, whether their investment banking analysts or their

new sales and people are traders. There's a fair amount of diversity there, both gender diversity and all other types of diversity. Yet when you get ten years forward, seven eight, nine, ten years forward, when there's managing director decisions, partnership decisions, those ranks are really thinned out and it does look much less diverse. What do you think the industry has to do to kind of keep those people in the workforce. Yeah,

so I don't think that there should be sponsorships. There should be allies UM people actively involved in trying to progress individuals careers. When I was on the trading floor, I love that the men and it was mutual on both sides me. But then we were coming together, what can we do to help you with your career? You know, I'm sure you don't want to stay on the trading floor.

What do you want to do in finance? And they introduced me to many different people and they were definitely helpful and facilitating that, But I know that that's not the experience UM with throughout all of corporate America or even within the financial industry. So I think there needs to be a bridge and to go from there. Lauren, what did you learn from Wall Street and would you

ever work on Wall Street again? I learned so many things. Um. Obviously, working on the train floor was a very fast pace alpha mel environment and I was the only woman on the floor. Um. I think one of the best devices that Richard Rose and Wise It could give me while I worked at Rose bat Securities is you know people

are going to notice you regardless. And he didn't mean anything by it, but he just said that, because I am the other in the room, and you know I'm essentially the elephant the room, make sure that I have something to say, something of substance to say when people approached me, because people are going to notice me either way, and there's no way of hiding, um and encountering behind other people. So I thought that was the best device that I would give. As far as you running back

to Wall Street, I I don't think so. I very much enjoyed my experience there, um, but I have been showed off into doing uh many more things that I'm passionate about that are making a much brander impact. Lauren Simmons, thanks so much for joining us. We really appreciate your thoughts. A fascinating story. Lauren Simmons, entrepreneur, founder and see of Lauren Simmons l l C. Featured it in the Bluemore

Markets magazine. They have a special issue focused on diversity. Really, uh suggest you take a look at that is where black men and women they really share their experiences on Wall Street and again, Vannie, it's just you know, my sense that, um, there's just not enough support to get them through the ranks. Again, I think they do a pretty decent job getting people in the door, but keeping them as a whole another story. Well, it's definitely a

question of willingness. And Lauren at twenty six, with that kind of experience under her belt, is you know, a great ambassador for somebody who went out there and did

that in spite of all the odds. I had a conversation with her esterday and she was telling me that she was the second black person to ever have worked on the New York Stock Exchange, which, really, when you think about it, the amount of people that have worked down there over the year is the entire history of the New York Stock Change heard the second black equity trader down there is really quite something phenomenal, I think, And if you read the Diversity Issue magazine, you'll see

that all of these people seem to be one off and that's just not good enough. No, it's not And as as she was mentioning, um, as Lauren was mentioning here, there really has to be support. And we've heard a lot of talk not just from the senior folks on Wall Street, but just senior management is c suite in general, you know, over the last decade plus about commitment to diversity, but there it just doesn't bear out in the numbers,

and we see that time and time again. And so that's why I think this Bloomberg Markets issue, there's a really good job that goes below the numbers and really talks to the people, interview some people that have worked on Wall Street black men, men and women, and they share their personal experiences and kind of really brings at home. So it's a good job by the team of Bloomberg Markets.

And I'm gonna be looking forward to seeing what Lauren Simmons does next because she's clearly a trailblazer in her fields. So Thank you to Lauren Simmons for joining us and speaking about her experience. It's time for Bloomberg Opinion. We are joined this morning by Rachel Rosenthal, editor Bloomberg Opinion based in Singapore, out with a fascinating column, and it goes to that whole H one B visa issue that

is making. It's always a political issue, but it's even a bigger one this year with President Trump looking to rein that in and uh, interesting column. Um, Rachel's out with this column, Big Tech wants you to believe in a skills gap. Titles suggest that maybe Rachel doesn't necessarily believe that. Rachel, thanks so much for joining us here. I've always heard from Silicon Valley that these H one B VISs are critical to their businesses because the US

does not produce enough skilled labor. What's the real take there? Do you believe that? Um? Well, you know what, I into Stanford, so in the heart of Silicon Valley, and I very much believe the same. And you know, I think I would have agreed with you until about about feed or ten weeks ago when I started researching this piece. Um. You know, you start looking at the data and it

just doesn't really add up. UM. And you know, if you look at the number of graduates that we have in computer science and engineering, if you look at the number of them graduates overall, and then you look at the number of openings, the number of vacancies, patterns of wage growth, and you look at a whole host of other things. Um, you start to see some that the thread really starts to unravel there, and you start you have to kind of ask yourself the bigger question. You

know what, um, what do you tech companies want? And it's not just tech companies, it's companies across the tech industry. You know, they're tech workers and all kinds of fields that you know, I see you know, every kind of company has I F workers for example, so um, they could be in in retail, to restaurants. So UM. There is a lot of incentive to claim the there are enough skilled workers because you can get a pretty serious discount on on foreign labor um. And these are guest workers. UM.

So I think. You know, there's a really fascinating paper upon which a lot of my research was based, UM, out of the Economic Policy Institute. It came out in May, UM, indicating that you know, there are four wage levels for each one vs UM, and the two lowest ones companies can get a discount. UM. It was up to you know, thirty six percent for the lowest wage bracket and eighteen percent for the second lowest. Now that was that that they had to look at a narrowest place within the

DC metro area in a certain computer occupation. UM. But it was pretty telling to me that this kind of UM, this kind of discount can really add up and create huge savings and create incentives for this narrative to persist. So Rachel talked to us about degrees earned versus openings. So in the United States, for example, you know what

degrees are earned versus openings? Sure, um, So if you know, I went through a lot of data which is UM you know, and they're about uh, roughly five thousand stem degrees UM in in the U s UM in the latest year that they attracted, which was twenty eight keen UM. So that's up six from a decade earlier. So people are you know, American students are getting lots and lots

of degrees in in quote unquote STEM fields. And you know, I think you know those knees europe impuls would be like, oh, well, aren't all those graduates you know from abroad, and they're not. You know, what I found was that actually north of nine d son of them were actually American citizens and permanent residents. UM. Now that picture can change as you go up the scale in terms of UM graduate degrees, and there's that's a little bit of a different metrics.

But UM, you know, when you look at the bachelor's degrees that are earned, a whole lot of them are Americans, Americans and permanent residents. And if you look at openings, you know, you have to consider that there are certain openings that go that typically would go to UM someone who had a specific type of degree that's called computer science degree or related computer science engineering field. UM. But that you know, not everyone in these fields necessarily has

to have a computer science degree. I'm sure. I mean Steve Jobs themselves is a very good example. UM. But I know, you know, just from my time at Stanford, I know a number of people who ended up in tech who did not make during computer science UM. And it was actually pretty interesting that you know, two thirds of um I T occupation new entrants do not have a computer science degree. So then you have to consider the entire pool of UM American bachelor's degree owners as

potential people who could be trained. And I think UM for for this type of work. And I think that you know, that is really a key feature in some of the research that I've done, is you know, why, what's the incentive to train someone when you've got you know, ready to work cheaper labor that's coming in from abroad. What do the tech companies say, UM, in response to kind of the economics of this the cheaper nature of

some of these foreign workers is what's typically the response? Sure, I mean, I think the typical response would never be to say they are cheaper. And I think that there there is a tremendous backlash UM when Trump is issued is executive were in June? Um, you know, And and there are a lot of like really legitimate claims to be made that you know, a lot of there's a lot of intelligence and innovation and entrepreneurships UM that and that America is built in the foundation of immigrants, which

I a hundred percent beliefs. But you have to remember the hm vvs as holders are not immigrants, I mean their guest workers, and and they are you know, get trapped in what's a lot of people called some version of indenture labor because they are tied UM, they're sponsored by an employer UM, and it's really difficult to move from one employer to another. So they you know, they they're they're they're kind of stuck and you know, they don't have UM. You know, they could be here for

three years, they could be here for six years. Sometimes that six years gets extended, sometimes it doesn't UM. So you know, it's they're they're they're really suck. And I think that you know, they because their company sponsors their visa and because their visas side of their immigration status, and because their immigration status enables them to stay in the US, pay taxes, have families, and be part of you know, be part of the communities that they're part of.

You know, they can't whistle blow on their companies. So I think, you know, it's very easy to paint this picture is UM, you know, anti immigrant UM, but it's really not, because I think the system actually really hurts not only American workers but which want to be these the holders as well. What happens to the American workers that don't get those jobs then? So you know, there's

a number of things. You know, I think you could look. Um, you know, I've often casually wondered to myself like, why are there so many you know, computer engineers and finance and you know, it was always just sort of a curiosity to me that I never really thought twice about.

But you know, if you think about it, when you know you're not seeing um wage growth, um, you know that I should mention that the wages in the I T sector, for example, are higher than the median UM wages in the US broadly, but they're not necessarily growing. I mean, I think there's this idea that you know, if you get a computer science degree or programming, you're you know, you know how to code, that you know,

you're you're you've got a ticket to success. And I just, you know, I don't necessarily know that that's that that's the case. Um, So you know, I think that, UM, you know, this is this is something that you know, you just have to consider all aspects of Rachel. It is a fascinating bloombergiminion base, and we always love to focus on these because they tend to put out a little viewpoint that might differ slightly or even entirely with what's out there sort of in the ether. So Rachel's

thanks for that. Rachel Wilson's Hall is editor at Zloomberg Opinion and her piece today, big tech wants you to believe in a bills gap subtitle, but what they really want is a steady supply of cheap, dependent I T workers. I think that might be called capitalism poll. Yes, exactly, and it's certainly different from the narrative. What is the

latest between TikTok and the United States? What company is interested in buying TikTok and will they be able to Let's bring in Andrew Brown, Bloomberg New Economy editor, and in fact he is the editorial director of New Economy. Andy, very great to have you. We've had so many reports

over the last couple of days. Fox reporting today that several companies, including Facebook might actually be interested Axio, saying other companies are interested in the one we knew about yesterday Microsoft to any of these companies have a better chance than any other. Look, I'm not I'm not really in a position of of weighing the merits of the

deal itself. Um. You know what, what what you have here is a US president, um who has weighted into this incredibly complicated corporate situation that touches on very fundamental issues for the United States around freedom of speech, the operations of a market economy, and he seems to have decided in a in a peremptory, in almost arbitrary way, that a deal, some deal, whether it's with Microsoft or some of Facebook or some of the other actors that

you've you've mentioned, must occur by September fifteen. Otherwise one of the most popular apps in the United States right now, an app that's been downloaded a hundred and sixty five million times. Um an app that gen z uh folks live by. It's gonna be it's gonna be close, it's gonna be closed down. And needless to say, um, Chinese media absolutely outraged by what's going on. So Andy, let's

get to the heart of the matter. I think the heart of the matter might be h security, national security, and is there any evidence to suggest that there that TikTok does represent a risk to the United States. Look, there is no direct evidence that um uh, you know, TikTok is giving us data to the Chinese government. There is circumstantial evidence there are sort of there is what ifs right. So what if the Chinese government said to to Bike Dance, which owns TikTok, you have to hand

over this data. Would would TikTok to well they the company insists that it wouldn't. Um, it's actually highly unlikely that any company would say no to the to the Chinese government to such a request. So it's all it's it's all hypothetical, I mean, and that that hardly represents smoking gun evidence that TikTok is a national security But having said that, there are really genuine questions, uh, and fears, um, you know about data security and the Chinese government. I mean,

and these go back years. In two thousand and fifteen, you remember there was a there was the Chinese state hack has got into the office of the U S Officer of Personnel Managers Management and installed data of four million you know, US government federal government workers. More recently, these accusations of state hackers have been getting into labs and stealing trying to steal secrets on the development of COVID nineteen vaccines. So you know, there are legitimate concerns.

The question is is this the right way to address these concerns exactly? And also you know, can the US take a fee for doing so? I mean that's that's the part that you know, almost becomes a funny at that point, and Narricolo is just telling reporters right now that is not your TikTok deal. Fee to the United States is a quote key stipulation. I mean, where did that come out of? Yeah, I I don't think the the stipulations in this. I mean this is this is

this goes back to the sort of the this whole arbitrariness. Um, you know there are presidents, right, so some years ago, um, the Chinese owner of grind this this you know dating app, was forced to sell after a review by Sippius, which of course the U. S. Treasury body that that that screens foreign investments. But but you know that this was there was a process there. I mean it was it

was as all as all cipious processes are. It was secretive, but nevertheless there was a process and companies could strategize around that process. I mean, here you have, um, you know, essentially it seems like a decision coming straight out of the the the West wing. The owner of the company, John Yeming, he's been telling employees he has no idea really what's going on? But he thinks the ultimate aim here is to close down, um, his app and that that's what he thinks. The end game is so andy.

I know you have your ear close to uh, what's happening on the ground in China. What's the response there? I know the Chinese media has had some response here, But if you heard some other people that you trust your sources about kind of how they view the Chinese

view of what's going on here. Yeah, I mean, well we we we've all seen the Chinese you know, state media reaction, China Daily going one about the smash and grab rate and who Hi Jin, who's the editor in chief of the Global Times, is saying this is this is open open robbery. I mean, um, look, this is in many ways, TikTok is the avatar of of of Chinese tech ambitions. I mean, Chinese people are incredibly proud

of of of what it's achieved. It's the first Chinese internet company, social media company to come into the United States take on the huge these gigantic incumbents and when you know, I mean this this is it is the essence of the of the capitalist success story. And you know in China. Essentially, the view is they're they're trying to trying to you know, close close down UM and and an app that UM has taken on, and just beta American companies that you know, this is basically trade protectionism.

If this happens, you know, kind of new company keep it as successful. Will will people just be fine with new ownership or you know, the people that have been on TikTok, especially the younger fans, have shown themselves to be pretty politically active. Will they sort of boycott TikTok if Microsoft buyser? I mean, you can't answer that, I guess, but it's an interesting question, right, Yeah, I'm I'm not the expert on that. I'm not even the expert on

on on TikTok. I don't I don't use it myself, but um, you know, it seems it seems to me that the concept is brilliant and simple. I mean, this is sort of sharing goofy video, it's family fund UM very much now a part of the lifestyle of a generation of young Americans, and they're not understanding why this app needs to be closed down either. I mean, this is why you need to have a national debate, why

you know, this is a serious issue. How are we going to handle in the long run, um, Chinese investments in this area? How how are we going to deal with with with Chinese companies that that access US data? Um? You know, the the the the approach now which is is close it down? Um. I mean this is what

the Chinese would do. I mean, you know, if the idea, um, you know, is to preserve freedom of speech in the United States, to oppose the Chinese style of doing these, well, you're actually acting rather like the Chinese would do exactly right. Always fascinating talking to Andy Brown. He has a great perspective all things China. Andy Brown, editorial director for Bloomberg New Economy, talking about that crazy news about TikTok? Is it going to be shut down? Is it going to

be sold? If it's gonna be sold, who's going to buy it? Does President Trump and the government get an investment banking fee? All kinds of things we are following right now. We'll have that more for you coming up. Thanks for listening to Bloomberg Markets podcast. You can sub school ribe and listen to interviews at Apple Podcasts or whatever a podcast platform you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm

on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio