Broadcasting live to New York, Bloomberg eleventh, Rio to Washington, d C. Bloomberg to Boston, Bloomberg Well unders to San Francisco, Bloomberg nine to the Country Serious Exam General one nine and around the globe the Bloomberg Radio plus Jappen Bloomberg got gone. This is taking stock commercial real estate. Where is this very important market heading. I'm Kathleen HAZELNG with
PIM Fox. We're gonna be speaking to the president and CEO of Marcus and Miller Champions based in Encino, California, for the largest brokerage firm in the country that specializes in commercial real estate, and they see steady job growth creating demand for both housing and commercial space. Pim and I want to know a little bit more about the choices that people make when they decide where to locate, for example, urban centers, close knit communities, maybe over suburbs.
Will find out more, but right now, let's find out all the business news from Charlie Pellett and the Bloomberg News. All right, thank you very much, PIM, thank you, Kathleen, The dal the SMP NEZDAC all advancing on this Friday, May SMPT five hundred index rebounding from a seven week low, and we are brought to you by Carbonite. You never know when disaster will strike your business, from spilled coffee to malware attacks. Protect your digital files with secure automatic
cloud back up from Carbonite. Visit carbonite dot com today to get two three months with offer code broadcast. SMPT five hundred index up fifteen points, a gain of eight tenths of one percent, as DAK is up sixty one points, a gain of one point three percent, and the down Jones Industrial Average climbing now by ninety four points. It is higher by five tenths of one percent. Applied Materials
surging today after its earnings beat estimates. Supply Materials up thirteen point five percent, up to sixty eight to two dollars and fifty nine cents. Michael O'Rourke is chief markets out of just A Jones trading. On Bloomberg Television today, he said, we may be looking at the start of a bear market, and that's because of a lack of new highs about three and a half percent from the
from the all time higher registered a year ago. And you know time and price are key things in the stock market, so what's working for the market right now is prices held up. Obviously times working against us, and what we have is a negative fundamental backdrop and of course fed tightening and some decelerating data in the economy
that's keeping the market from breaking out. So the next six months or so I think are going to be pivotal because if you if you don't actively make that new high, it becomes harder and harder as time goes on. And gold down a dollar now a drop of point one percent to thirty two on Wall Street. Now, let's look at other news from around the world. Charlie thank
you from the Bloomberg news room, and Mark Crumpton. Three European security officials say the passenger manifest for egypt Air flight eight oh four contained no known names on current terror watch lists. That's according to the Associated Press with sites officials who were not authorized to speak about the ongoing investigation. The passenger manifest was leaked online and has
not been officially verified by egypt Are. Flight eight oh four was carrying sixty six people from Paris to Cairo Thursday, when it's believed to have crashed. Officials say some wreckage has been found, including human remains. Family members of those who were on board a missing egypt Air flight gathered in the Cairo Mosque today to pray for the victims,
many breaking into tears as they were in prayer. One man with four relatives on the plane says it's very hard for the family, and another says his family is holding out hope their loved ones might still be alive. Egyptian officials say it is not likely there are any survivors Amy Morris, Bloomberg Radio Washington with or without symptoms. The Zico virus is linked to birth defects. That warning
from federal officials today. President Obama's urging Congress to approve the one point nine billion dollars he's asked for to fight the mosquito boy and virus. This is not something where we can build a wall to prevent mosquitoes and don't go through customers. The agency that owns the World Trade Center has reached a deal to end a payment dispute with a firm that worked on the site. The Wall Street Journal reports the Port Authority will pay twelve
point three million to Colvino Construction Company. Global News twenty four hours a day, powered by our hundred journalists in more than one hundred fifty news bureaus around the world. From the Bloomberg news Room by Mark Crumpton. Charlie, and we thank you in this headline to pass along. Mexico says l Chapo Guzman's extradition has been approved. SMP five hundred index up fourteen points as we recap now the SMP of two thousand fifty four, a gain of seven
tenths of one percent. I'm Charlie Pellaton. That's a Bloomberg business flash. You're listening to taking stock with pin Box and Kathleen News on Broomberg Radio. A new report by the Real Estate Board of New York There's spring retail report says that discounting is a theme, at least in cities such as New York. While commercial real estate remains fundamentally strong, there is a slowdown that is occurring both at the national and in global marketplaces. Let's find out
more from Hassan Naji. He is the president and the chief executive of Marcus Millichap based in Encino, California. Hassan, thank you very much for being with us. Tell us your view of the commercial real estate market today. Happy to do it. Thanks for having me on the program. Always good to be talking with you, PIM. The environment for commercial real estate has been ideal in the in the fact that we have steady job creation, but not at a rate that is causing a lot of inflation,
which is given the feed a lot of flexibility. So you have a combination of improving fundamentals on the supply
and demand of commercial real estate. Plenty of demand coming in for office space, for apartments, for retail space, and so on, occupying more and more space and paying higher rents at a time when the valuations have been supported by low interest rates, and so the yield of commercial real estate has been compelling for the last several years and remains very compelling in the average of the five or seven percent nationally across the whole spectrum of commercial
real estate at a time of as you know, a lot of our altility in the stock market and uncertainty elsewhere. Some how much has the rising home prices in some parts of California, as you well know, a large part of the populationship priced out of home buying if you look at their their income and debt to income ratios, etcetera. More people renting more apartment buildings being built. How's that
played out for commercial real estate. It's been a very favorable trend for apartments in that rental demand has been at record levels for now several years, partially because of the affordability that you're speaking to, and partially because of
consumers preference. You know, coming out of the financial crisis and the severity of the housing crisis that we had in two thousand and eight two thousand and nine, a lot of people have a whole different view in terms of looking at at a primary residence as an investment, and so there has been a lot more caution among especially among first time homebuyers, UH, the thirty and the young forty somethings that would have normally bought a home at that particular stage of their lives that are now
choosing to rent. And the apartment industry has been very quick to respond to that extra demand by UH constructing and designing the kind of product that the thirty something really prefers, and the empty nester that's now selling a home and UM preferring to rent in an urban environment is beginning to show. So it's it's been a combination of both the affordability issue and only a consumer preference
towards renting. I wonder if you could pick up on that has some and US speak a little bit more about this trend of people looking to live in urban areas and how that is creating a tighter bond between residential and commercial real estate them It's a very important trend in that we really have observed over the last twenty years the revitalization of so many downtown areas urban areas beyond just creating a twenty four hour environment where
people want to work and live, it's become more than that. It is now uh, really much more of a series of amenities, both cultural and transportation oriented amenities and access to different kinds of retail acts, different kinds of services that have really free sprung back into urban areas that we really hadn't seen for a long long time since the suburban growth dominated basically the death nition of of
US US growth over many decades. This revitalization has created the need for mixed use product when it comes to real estate, So you're seeing a lot of residential being built along with retail, along with um the kinds of services that you would need in order to basically have a safe, contained population within an urban area. The biggest
challenge is the education system. So when you're talking about young adults, typically in their thirties, they're waiting longer to get married, and those that are getting married or coupling are waiting longer to have kids. So they're staying in these basically revitalized downtown areas and really enjoying it. But when it comes time to start a family, there is still a major disadvantage in the urban areas when you talk about schooling and the cost of private school versus
the quality of public schools. And that's where we're still seeing a young families begin to move into the suburban area. And if you can even afford a them in one of these areas, a lot of your kids. The prices have gone up so much, right, But quick final question, where are this? Where's this? A couple of sweet spots for people who want to invest in commercial real estate. You've got about twenty seconds. Great. I would look at Dallas because, unlike Houston, it's still adding a lot of jobs.
I would look at Atlanta and Phoenix as a recovery markets from the lower risk uh basically lower yield but lower risk markets the San Francisco Bay Area, Los Angeles, New York and and the Boston area. San Francisco and New York price down. I don't think they are because their supply constrained and the yields are low for a reason. Okay, well, you're giving us lots of interesting ideas as I'm Nagi, thank you so much for joining us today, President and
CEO of Marcus and millichap uh. They are the largest brokerage firm specializing in commercial real estate. I'm Kathleen Hazel and pim Fox taking Stock on bloom Brig Radio. Bloomberg Taking Stock is brought to by Audi Medalands in Secaucus, New Jersey, powered by Benzelbusch, offering a commitment to service, luxury and value with total transparency. Start your journey at Audi Medalands dot net and define the way you drive