Merz Confirmed as German Chancellor After Second Parliament Vote

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Balax Deal Paul Sweeney live here in our Bloomberg Interactive Broker's studio. We're streaming live on YouTube as well. To check us out there. So it took longer to expect it, but Germany now has a chancellor. Ros Mathison joins us Bloomberg News Director for Europe, the Middle East and Africa. Ross, like most Americans, I woke up to this news and then I was like, is that.

A big deal? Apparently it's a big.

Deal not getting kind of elected on that first ballot. Can you give us the context of there?

Well, that's right, I mean it was supposed to be a pro former moment. It was just to set peace vote in Parliament for him to be formally confirmed by lawmakers as chancellor. Then he would go off Stark cabinet and he was due to go to Paris tomorrow to meet with the French leader. So it was all supposed to roll off from there, and of course he'd already done the work to get these big changes through Parliament in terms of removing the debt break on Germany, big

So would we.

So he already didn't have a mandate, So then now is it like an extra non mandate.

Well, I mean he does. He does have a coalition within his with his block and the center left Social Democrats, so he's got a functioning coalition in Parliament. But it just shows again that there are lots of strands against him, even within that coalition, and that some lawmakers may object to certain policies. It could be quite difficult to negotiate changes to policy, including with the Social Democrats between which

You'd have to say, ros what is the job one here for mister Marrison and his government?

Now?

Obviously he's worked already to get that depth break lifted, which is a really important step for Germany to be able to unshackle itself fiscally and to get these infrastructure and infrastructure and defense packages moving. But also they've got to now work out how to spend the money. You know, there's a lot to spend it all with infrastructure, but there's a lot of red tape also involved in bureaucracy, and so how do you get this money flowing and

All right, ros, we appreciate it.

Thank you so very much. Roz Matheson, Bloomberg News Director for Europe, Middle East and Africa. Frederick Mertz getting the backing of Parliament in a second vote for Germany's a next chancellor. This is the latest ballot of lawmakers after a failure in the first vote that came to a shock as everyone market participants and politicians alike.

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All right, let's keep going with the door dash theme here, agreeing to by delivery in a less than of four billion dollar deal three point nine billion dollars. Us Mandy p Ssening, Bloomberg Intelligence senior tech industry analyst, joins us, Now, what do you make of the price tag?

Well, I mean it's not one of the expensive acquisitions that we have seen with these online delivery companies. Multiple is quite low. It's about you know, one point two times ev do sales. So look, when it comes to delivery companies, we know they have had their challenges with profitability and that's why you know, Delivery, even though it ipoed a few years back at a much higher valuation, you know, the selling price is a lot lower because

And Alex, I know you're to know this information. JP Morgan advised DoorDash and Allen and Company and Golden Sacks advise a delivery U. So again, bankers getting paid.

So that's what we like to see.

I believe in that exactly. Talk to us.

I'man deep about so, I'm a vowed I do not support this home delivery of food thing, and my kids know that, and I won't pay for it, and they get put in a penalty box if I ever see a charge on a credit card. Talk to us about the economics of delivering food here in the US versus delivery delivery use wherever they are in the UK.

Yeah, I mean, look this, the three side marketplace businesses are not the easiest to run in terms of unit economics. And that's why you know, DoorDash has emerged as the category leader because not only have they executed better in terms of batching efficiencies and really making sure they optimize the time of the person who is delivering the order,

I guess the question for me is how much runway is do these companies have, Like how can they grow their total addressable market when in theory like you're not going to use this in the middle of a suburb. Maybe do in the suburb, but not in like a rural area.

I mean, just look at how much they have grown since the pandemic, which is when they got the big bump, and since then they've been, like DoorDash has been compounding top line at a twenty percent keeger. And the reason they've been able to do that is they're pretty much

Yep, absolutely all right, Mandeve, thank you so much. Sweeney Offspring are still not allowed to use any of these food delivery.

Service so they do they still do once.

On one will sneak by and then I shut off the credit cards for I've seen it happen.

Nothing makes me more angry than seeing a delivery at the front door. Just go mental, exactly.

It is convenience, but it's so expensive and just the value is not there for me. All Right, Mandy, you've saying he does that stuff for a living for Bloomberg Intelligence.

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Of the topics at Alex I like to revisit on occasion is the commercial real estate business. Talking about a business that was really impacted by the pandemic, particularly in some of the larger markets like New York City, so it's wrong. We like chatting with our next guest, Best Friedman. She's the chief executive officer at Brown Harris Stevens. She's joining us from New York City via the Zoom thing. Best thanks so much for joining us here here on

Yeah, I mean, I think you're seeing two different narratives. You know, you're seeing openings, but you're also seeing a lot of closings.

And we're just not out of the woods yet.

We started to see the early stages of what I would describe as a moderate recovery. But there's still some great challenges, specifically in places like New York City. In San Francisco, I know, has similar challenges, and we need to address issues like homelessness, crime, all of those sorts of things need to be addressed in safety, and it's impacting our city overall.

And so we're getting there. We've made progress.

Last year was better than twenty twenty three, for sure, wasn't as good as twenty twenty two. And some sectors are performing better than others. A multifamily performed really well and it's continuing.

To do so.

And nationwide, vacancy rates are at something like seventeen percent or in New York City at seventeen. I think nationwide it's fourteen and so for the quarter one twenty twenty five, So look, it's a mixed bag.

There's some good and there's bad.

What is the most misunderstood piece of the commercial real estate market right now?

You know, I think that you know you're hearing there was a lot of doom and gloom that people were talking about, you know, in early on after COVID, and I think you've seen a decent recovery and the demand is there, and there is demand for office space, just FYI, I think that's misunderstood.

There are people that do want to be in the offices.

People are requiring it in New York City, and I think that's a good thing. But the demand is for quality and I think you know, the B and C office spaces, we're gonna have to do something with those. But I do think people have returned to the office, want to be here, even if it's partial and there's hybrid working. I think that you know, that is misunderstood. There's not this sort of work from home across the country.

Hey, best talk to those about just kind of the lending markets here. Let's say I wanted to develop a property or buy a building.

Is my local bank going to be there for me?

Depends, I mean, it all depends on what building, who you are, you know, it's all of those issues.

All of those things are are important.

And you know, there are some loans becoming due at the end of this year and next year. I think next year, twenty two, twenty six, some loans are maturing in the commercial realm. It's something like one point eight trillion dollars, So that's what people are concerned about. But yes, there is money out there and people will lend. It's tighter than it has been. Credit has been really hard.

Yes, but it's not what it was, you know.

I think the economic uncertainty, the higher rates, inflation, even tariffs, all of that stuff, you know, has people rethinking things and being a little bit more cautious.

I think everyone was kind of waiting for the big fallout to happen and it never really did. Does that eventually happen or is it going to be on sort of property to property rolling basis over the long term.

Yeah, I don't know if there's going to I mean, predictions are impossible. We none of us know really because every day is a different news story and what's going on in the economy. So I don't know if there's going to be some sort of huge fallout, if it's going to get rougher.

It could, but I do think it's depends.

It's almost like if you look at retail, which is a mixed bag. You see, you know, Walmart's opening up and Trader Joe's opening up, but then you see Walgreens closing, and so you know it's and so it just depends on what it is. You know, there's it depends on what is happening and what the business is and where it is and all of those things.

Best talk to us about South Florida.

Is it still strong or is it rolled over?

You know, South Storea, Florida is is doing well. It's it's it's decent. It's it's it's steady. There's demand. Uh, And you know, I think there was an article today in the Journal about Florida and the demand for real estate. There is decent people but want to be in Florida, and there has been this sort of migration of businesses moving to Florida, and so I think that has remained the same. I don't see that changing anytime soon, so we'll have to see all right.

Best, Thank you so much for joining us. Always appreciate getting your perspective. Best for reading. She is the chief chief executive officer of Brown Harris Steven's giving us an update on kind of global real estate. Again, a little bit of uncertainty out there in just the overall economy even finding its way into the real estate maybe not going to hold off on a certain project, or hold off on upgrading or something along.

I feel like this reminds me of the default cycle we were supposed to see in twenty sixteen, Like that huge fallout that was supposed to happen that all the private guys were all excited about.

That huge wave didn't happen.

It didn't mean there weren't opportunities, but that wave didn't happen. It feels like something similar is also evolving in the commercial real estate space as well.

Yeah, and we were told by a lot of bank anlysts that you'd see probably more in the small, mid sized banks who maybe had some more local commercial real estate and residential real estate as opposed to the large banks, which really real estate is a small, small part of their loan portfolio.

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Let's talk new energy finance. I don't know how the whole new energy world is going to play out with President Trump here. It just feels like, boy, that's a headwind. But we're going to break it down. So we've got uh, we have here, We've got Paul Ascano, Bloomberg BNF Seniors. Sochit So, Paula, how do you guys think about wind, solar? I mean, just all these new greener energies just frame out for us kind of is it is this administration a headwind to that? And if so, by what degree?

Yeah? And thanks for having I'm back.

Certainly, every industry we have to we have to look at every industry separately and in conjunction. We have to align to understand what are the common threats and then what are the individual characteristics of each of those industries. So so far we've we've seen obviously offshore wind has been badly hit, mostly because offshore wind is heavily, heavily reliant on federal agencies and federal authority, whereas solar has been pretty much unstoppable.

There's very little things.

That Trump and the administration can do to really slow down growth. And then battery storage with this nation, technology that's coming to support both soul and win generation has also been i would say somewhere in the middle. Not as badly head as offshore wind, but tariffs have had much a much bigger impact because the US still imports a lot of the batteries from China, because the batteries apply chain is not as diversified as a solar or the wind supply chain.

So you guys have a no doubt that talks about how US clean power build will caudruple by twenty thirty five despite all.

Of these risks. That's a big number.

So you mentioned that solar is unstoppable, battery and energy storage potentially also, can you walk us through your outlook for solar in particular.

Yeah, the reality is the US and pretty much everywhere in the world will need power. What's the fastest, cheapest new source of power generation? It's solar like hands down, It's easier, quicker, to build. If you can get the permits and the great connection on time, which are really the only bottlenecks to get to getting new solar built,

Well, talk to us about the towers here, Like, if there's one hundred and forty percent tariff on a battery coming in from China, doesn't that make a lot of projects just unfeasible economically.

Yeah, that's a great question. And there's certainly some battery projects, big battery projects in parts of the US there are going to be delayed. There's going to be probably delayed by twelve to eighteen months as everyone figures out what the final tariff.

On China will be.

But the reality is, if we look at what happened to the solar sector and the global soular supply chain back in the day when Obama started introducing high tariffs on solar panels, supply chains re route very very quickly.

What about battery storage and energy storage, So.

Battery storage is as I said, it's what it's mower hit for by tariffs and solar because of its reliance on China. So we had to we had to re assuming a slowdown in new additions because right now the ramp up has been pretty quickly, but the role of battery storage for power markets has been very, very critical over the past couple of years. It has probably arguably saved Texas from blackouts in the past twelve eighteen months because the bit of batteries to ramp up quickly and

How hard How hard is it to get connected to the grid? If I build a wind farm in the middle of West Texas like I saw on land Man, they're off the grid.

How do you get stuff to the grid. It's very very difficult.

The some of the difficulties are obvious when there's a very very long distance between where you're building the farm and where you want to deliver the power. So you need to get transmission built, which means you need to get everyone along the way who owns the land where that transmission, where those transmission lines are going to be, to approve to like allow you to build it, which, as I'm sure you can imagine, is a very very

And yeah, is it easier to do that or build a pipeline?

Thirty seconds easier to do that than build a pipeline, I would say, except if you're in Texas or Louisiana.

Okay, well that's a fair point. Also, I'm obsessed with the transformers, like the thing you need to plug into the grid, like just that one piece of equipment is the backlog is huge.

Remembers the frequencies have to match as well, otherwise you will have a big problems.

Hence all the years of study and then also the questions of how much alternative or intermittent energy you want on a grid. Just ask Spain and they're blackout from a couple of weeks ago. It was really great to see you. Thank you very very much, Paulo Ascano. He joins us from Bloomberg b n EF. They do all the great research on energy across the board, whether clean energy or otherwise. And they do technology and they do financing.

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