Broadcasting live to New York, Bloomberg eleventh, Rio to Washington, d C, Bloomberg to Boston, Bloomberg to San Francisco, Bloomberg nine to the Countries Channel and around the globe the Bloomberg Radio plus DAB and Bloomberg Got Gone. This is taking Stock. I'm Kathleen Hayes along with Pim Fox. We're gonna take a look at the commercial real estate market.
A lot of people are weary of stocks and kind of wondering about bonds, and they're looking for places to invest him that are liquid and alternative for many people. This is a good one. Yeah. We're also going to talk about the office, the office space, business retail of We'll take a look at malls as well as ground up construction. Also look at the condo market. Right now, let's take a look at business news. We've got Charlie Pellett at Bloomberg News from and thank you Pim, Thank
you Kathleen. Let us begin with crude oil stocks are fluctuating, but crude now trading at fort Arrel. Talking about West Texas Intermediate down ten cents there a drop of two tents of one percent. We did see Brie of Brent crude briefly breach fifty of barrel right now forty nine seventy nine a barrel on brand up five cents again
there of point one percent. Stocks are coming off of their strongest rally in almost three months, Mixed data offering little clarity on whether the economy is strengthening enough to withstand higher interest rates as early as next month. Diane Swonk is the founder of d S Economics. Clearly the Fed is attempting to make this smooth, although let's let
let's face it, what's happened since December. The moved in December kind of a non issue, and then all of a sudden, we're dealing in this geopolitical and economic environment that's globally still fragile. And I think it's interesting that although we didn't hear a lot of economics from President Obama this morning, the real issue is geopolitics and policy are now economics. And I think that's very important as well,
because those can affect the economy quite a bit. In equities struggling for direction today as investors step back to Assessa two day events that added nearly three with sixty points to the down. Jones Industrial average Costco wholesale shares gaining the most in more than six years after earnings topped. Analysts estimates assign the warehouse club is weathering a volatile retail climate. Costco shares are up now by three point
nine percent. Sears Holdings considering options for its Ken, Moore, Craftsman and die Hard brands as what was its Sears Home Services repair business. Sears Holding shares up six point one percent. Abercrombie and Fitch plunging after first quarter sales trailed. Analysts estimates Abercrombie down sixteen point seven percent, Gold down to eight to the ounce, a drop of two tenths of one percent, to thirty two on Wall Street. Now we'll look at other news from around the world. Thank you,
Charlie from the Bloomberg news room. I'm Alex Steel. Donald Trump has hit the magic number. According to the Associated Press, he now has a number of delegates needed to clinch the Republican presidential nomination. The AP count has Trump with one thousand, two hunder and thirty eight one more than is needed. A review of Democratic presidential primary results in Kentucky has found Hillary Clinton still ahead of Bernie Sanders.
That's According to The Career Journal, Bernie Sanders and Hillary Clinton both picked up twenty seven delegates after the May seventeenth Kentucky primary, but one delegate was yet to be awarded from the sixth congressional district that goes to Secretary Clinton.
At a press conference in Japan today with leaders of six other industrialized nations, President Obama commented on the Taliban's appointment of a new leader following the death of Mullah Mohammed Monsoor in a U S. Rohan strike last week. What they need to enter into serious that are led by Afghans. On Friday, President Obama becomes the first sitting president to visit Hiroshima. The battle over gay and transgender
rights is spilling over into other issues in Congress. A thirty seven billion dollar measure to fund the Energy Department and water projects has been killed in the House. It was opposed by many Republicans because of a provision designed to bar discrimination against AIDS and transgenders by federal contractors. The head of New Jersey States Senate wants to move quickly on drumming up support for two new casinos near New York. Steve Sweeney says extra time is needed to
get voter approval in a November referendum. Governor Christie says plans for the casinos are on life support because of financial turmoil. In Atlantic City Global News twenty four hours a day, power by journalists in more than a hundred and fifty news bureaus around the world. From the Bloomberg News Room, I'm Alex Steele, Charlie, and we thank you and again recaving a mixed picture for stocks. The Dow
is lower by point one percent. The SMP five hundred index little change that is up by less than point one percent. I'm Charlie Pellett and that's a Bloomberg Business flash this he is taking stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Stocks are fully valued. That's what many guests are saying. Bond yields are low, the prices are high. If you want to get a positive return, if you want to find yield on an investment that you think is solid, where do you go. More and
more people are turning to commercial real estate. Speaking now to an expert in the field, Rachel Gilbert Solomon, co founder managing partner at Atlanta Advisors based here, in New York, recently opening a West Coast office and joining us in our New York studio. So, Rachel, welcome, Thank you for having me. So, uh, what would you say right now? Is hottest in the commercial real estate market? Where are you seeing the most demand? Was it? Is it multi family?
We know a lot of people are renting instead of buying. Is it? Is it retail? Where do you see a lot of demand right now? We see, uh, Well, multi family has historically been the asset class that has performed the best, and we see that continuing in this market, although I will say in a lot of the Class A prime markets there's been a tremendous amount of new product that's come online, so for the first time we're seeing a little push back in rent increases until that
new instruction gets absorbed. We see that continuing, But on the whole, as an asset class, we think multi family is still the best bet. Are you talking about markets like San Francisco, New York those kinds of places, Yes, San Francisco, New York, Chicago, Miami, um major gateway cities. It seems as though the competition for properties means that buyers or investors are maybe not bending the rules, but
at least expanding their horizons. Right. So, for example, I know that you've been looking at things like what reats do and they necessarily say, all right, a certain vintage of apartment house or a certain vintage of building they're not going to touch. That's changed, hasn't it, Yes, Pen that the boundaries and where institutional investors, reats and and
even private investors are moving very quickly. Used to be there was a line in the sand where investors, for for example, wouldn't invest in something that was built before nineteen nine because prior to that you had eight foot ceilings and that is not a desirable for a renter. But because it's been so challenging to find deals, we find that across the board, investors are pushing their boundaries.
They're willing to go to uh earlier vintages. They're willing to look at things that require a little more work to get that return. Rachel. How important is cheap credit? Now? The Feds may be going to raise rates a couple of times. Is here we've and and that is pushing up the short end a little bit. But in terms of longer term financing costs, you still have very low yields. Is that How much of a driver is that for
commercial real estate broadly? Is it going to be effective if the Fed moves a couple more times this year? The cheap credit is really instrumental in driving real estate, and we don't see that changing anytime soon. I know that there's been a lot of talk about the Fed potentially raising rates in June. The credit markets have priced that in a little bit, and we're still at historically low interest rates. So as long as credit is as plentiful as it has been, we don't see that affecting
the market. Rachel, that you've done what at the LANDA Part Advisors, what six hundred million dollars worth of deals markets like New York, San Francisco, Denver, Baltimore, Fort Flord of the northern New Jersey. But you also say that people are looking at I don't want to call him second tier, but alternatives. For example, rather than go to the east coast of Florida, you go to the west coast of Florida. It's sort of like, rather than go
to Williamsburg, you kind of go to Bay Ridge. At least for those who understand Brooklyn, what is that just because it's just you know, the competition or what what is causing this trend. Well, um, it's just very challenging to be able to find a return and so um again it's an experience. Is that because the seller is the seller not realistic, the seller wants too much and the and the buyer won't come through. I mean, is the bid ask spread closing or what's happening. Yes, we're
seeing a change in the marketing process as well. Because the market is so competitive, there is a tighter a tighter span in the bid ask spread. We're seeing the marketing process being condensed, less time for diligence, less time to close. Um. And because sellers know that while the market is like this, they have to kind of let's say make hey. Um. But it's all signs of a
very strong market. Because deals are closing a contract price, they're not being retraded, So that's a sign that there is a market clearing price and and the market's very robust malls. Rachel, We talked to Tom McGee this week. He's CEO of the International Council of Shopping Centers. He was at the recon convention on in Las Vegas. To me, he was surprising the upbeat on on on retail, on the demand for these mall spaces. I thought, you know, brick and mortar was dying. What are you seeing in
the market. Well, there's been a transition in the way people shop. Obviously a lot of shoppers move online, but regional malls are still integral as social meeting centers, and so what malls have used to be are very different from what they are today, and they're transitioning to become lifestyle centers. Maybe they're an indoor amusement park, maybe they're they're an indoor golf center or a fitness center. So they still are vital, but what they sell and how
they sell is definitely changing. Quick question, what's a transit village. A transit village is um apartment complex or a lifestyle center that is attached to maybe it's a commuter hub, a main station. And that is significant because it follows the trend that younger buyers and the next generation really want to be closer to urban centers. So they don't
want to live in a suburban life. And if they are living in the suburbs, they want to be someplace that gets them very quick access into the urban Centers. Thank you very much for joining us. Rachel Gilbert Solomon, co founder, managing partner ahead of the New York office of Atlanta Advisers, many thanks. You're listening to taking Stock. I'm pim Fox my co host Kathleen Hayes, and you're listening to Bloomberg Radio Bloomber. Taking Stock is brought to
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