WE ARE THE WORLD: GLOBAL CAPITAL FLOWS AND INVESTMENT OPPORTUNITIES W/ MICHAEL TURNER AND CHRIS LUDEMAN [12.01.2020]


 

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Spencer Levy
I'm Spencer Levy and this is The Weekly Take. With a new year on the horizon, along with new American leadership after the 2020 election, the United States is poised for a transition. On this episode, we turn to an international investor from our nearest neighbor, a country that is one of America's largest foreign investors to help put the state of the U.S. market in perspective.

Michael Turner
Over the long term, I think America is a pretty good bet.

Spencer Levy
That's Michael Turner, CEO of Oxford Properties, a multinational commercial real estate fund owned by one of the largest pension plans in Canada. Oxford has over 60 billion dollars of commercial real estate assets around the world. We're also joined by Chris Ludeman global president of capital markets for CBRE. With its reach into more than 100 countries worldwide.

Chris Ludeman
I think commercial real estate continues to be seen as a great place to invest and I don't think that has changed in any way, shape or form.

Spencer Levy
Chris, Michael and I will talk about what it's like to be a global investor in the U.S. right now. We'll visit markets from coast to coast, including cities of various sizes and demographics and other global regions as well. We'll look across sectors of commercial real estate and break down investment cycles and strategy in light of world events like the pandemic, the election and more. A view from abroad on capital markets here at home. That's right now on The Weekly Take.

Welcome to The Weekly Take, and this week we are joined by two friends of mine, Michael Turner, the CEO of Oxford Properties. Michael, welcome.

Michael Turner
Thank you, Spencer. Nice to see you. Nice to be here.

Spencer Levy
Nice to have you here. And another great friend and colleague of mine, Chris Ludeman, the global head of capital markets at CBRE.

Chris Ludeman
Spencer, Michael, good to be here.

Spencer Levy
And great to have you both. Michael, let's start with the big picture. How does the world of capital see the U.S. today?

Michael Turner
Let me just give you some comments on my perspective of the US. There's about 16 to 17 trillion dollars of negative yielding bonds in the world right now. That capital's got to go somewhere. One of the places in the world that does not have negative yielding bonds, very low interest rates, but not negative is the US. And that's different than Europe as an example where German bonds would be negative. I think that's a forward looking view that the world is telling you about the prospects for relative GDP growth. And over the long term, I think America is a pretty good bet. And in the near term, we're riding out the pandemic. It's a difficult period. The other distinguishing place in the short term in terms of performance in the world, as we know, is being Asia and Australia, which has performed relatively better than North America or the US or Europe.

Spencer Levy
Michael, let me ask you one more set up question. And I would note that CBRE is attaching to today's podcast a global view on global capital flows, which you can read more about. But people are going to ask us, why did you pick Oxford properties to talk about global capital when A there's such a close neighbor in Canada and B, Michael sitting in New York City during this conversation. But I think if you explain a little bit more about Oxford's Global Properties strategy, I think they'll understand more. So tell us a little bit more about Oxford's global strategy.

Michael Turner
We are a 60 year old business and had the pleasure of celebrating our birthday in April of this year. And we had a pandemic party at this point we operate on four different continents. Oxford is a global real estate investor, operator and developer. And really we look to build portfolios and businesses or platforms in the strategies in which we choose to invest thematically. Our favorite trends at the moment. And they were moving into this crisis. You'll like this, Spencer, are creds for credits, beds for multifamily meds for life sciences, sheds for warehouses and reds for real estate and data. So creds, beds, meds, sheds and beds. And we are really building verticals in all of those themes around the world, in addition to the businesses that we have existing in offices as an example where a hospitality investor, et cetera.

Spencer Levy
Oxford owns about 60 billion dollars of real estate around the world and was reading some of your reports and you're looking to double your portfolio size over the next six or seven years. Has the pandemic changed any of those plans?

Michael Turner
The pandemic hasn't changed any of our plans, Spencer, in March of last year, if I put my mind back then having to have conversations with my team around, this isn't your run of the mill balance sheet recession. This is a health care crisis which is compounding into other crises, including an economic crisis. But in my brain, for some reason, I thought this was going to be like a bear hibernating. I thought, you know, there's my bear analogy for you, Spencer being Canadian, I'm going to go to sleep and go into my den for five or six months and come out and get back on with things. And clearly, that is not what's happened, both in terms of timing as well as switching the lights back on hasn't been akin to the light switch we turned off, but it hasn't really changed our ambitions in terms of growth. Our growth is driven by really two factors. One is we're owned by a defined benefit pension plan and so their liabilities will double and that means their assets must double if they're going to be funded. And we also have a number of large sovereigns and other partners around the world who really like to co-invest with us because they like our values and our capabilities. And so those two sources of capital mean that we will grow and the pathway might be a little bit different and the priorities may be a little bit different. But the end goal is the same with or without COVID.

Spencer Levy
Well, Chris, let's dig into Michael's answer there. Michael saying, well, this was a crisis like none other, but his actual long term capital outlook is very similar to what it was before in terms of the total capital allocation. Is that consistent with what some of our other global capital sources are saying?

Chris Ludeman
Largely consistent. A couple of areas where we've all had to rethink what the probable future is, given what we've learned in the recent past, one which we can talk more of is the future of office and how it will be used and how things may change in that space and the impact of getting in and out of places more easily and through a lens of being healthy, clearly, hospitality is an area that had a lot of impact to it, but we're already seeing those kind of a bit as come together and a repricing in that space. Third is the continued uncertainty of certain segments of retail and liquidity markets have not yet been as wholly supportive of the debt markets repricing there. And then fourth would probably be what were our expectations about the stress, what's happened and what's likely to happen. But overall themes, I think commercial real estate continues to be seen as a great place to invest, and I don't think that has changed in any way, shape or form other than the quantum of investing in various segments and how that may be impacted in the near to intermediate term.

Michael Turner
Chris raises an interesting point. We come from a traditional perspective of real estate. If I really think about the history of the company and a lot of its DNA, which is we're sort of dirt gals and guys get to know a city, New York, London, whatever, and look for opportunity on the dots on the map. We've really flipped in the last few years. We need to build domain expertize and we need sector expertize because that has proven itself certainly in the last decade or more to be a greater driver of returns. Are you betting on the right sectors as opposed to, you know, was Phoenix a better bet than Denver? The distinction between did I buy offices or data centers or life sciences or shopping malls are much more profound than the city centers in which you pick. So we have had to evolve our own expertize to be more domain oriented as opposed to dirt oriented.

Spencer Levy
That's a very interesting Michael, because we have some of our largest investors who come to us to say we buy markets, we don't buy asset classes necessarily in those markets. So what you're saying is you've moved beyond market to going into the subsector as the number one driver of your returns?

Michael Turner
Yeah, I'm not going to suggest market does not matter, but let's say in the last 50 years, you're only allowed to make two choices. What is my sector or what is my market for probably 40 of those years? And you would know this better than me, Spencer, if you could only make one bet on two axes, you're going to bet on the market in the last 10 to 15 years. That has not been true. You are much better off betting on the sector than the market to generate higher returns on average, not always, not 100 percent of the time, but on average. And that doesn't dismiss market as a critical consideration. And we're not going to places where we don't know our way around and we don't have relationships and we don't have some expertize. But you can extend your sector knowledge to cities and jurisdictions around the world where you feel comfortable operating, where you have perhaps some competitive advantage, or you have customer relationships or some unique required operating capability to service that niche.

Spencer Levy
Well, Michael, let's push that a little bit and let me turn to you, Chris, because this has been one of the fundamental debates we've been having now for the last several months, which is there are some markets which are the traditional markets for large investors that include San Francisco, New York, London, Berlin, Tokyo. We can go around the world and a lot of people are down on these major markets. What's your point of view, Chris?

Chris Ludeman
Well, if you just take New York for an example, think about how many times people felt New York was done. And most of these major cities are big cities because of what they have been historically, what they are now and what they will become. They attract talent. They attract innovation, they attract capital. And when those three things come together, they'll be near term disruptions. And it could be caused by a whole host of things. In this one has been around an unexpected black swan in the pandemic, but doesn't mean they won't come back. And usually, like many situations where the companies or cities or relationships, they may have to take a step or two back before they take several strides forward. And usually in that readjustment, there is learning that takes place. It could be tangentially. If you think about some of these big cities, maybe the bubble is popped on housing prices and on rents. So those rents and housing prices may come back down, make it more affordable. So my sense is the big cities will come back. They will continue to be vital centers of innovation and capital deployment. But at the same time, if you watch the flow of people, you watch the flow of capital and innovation, some of these emerging second tier cities that are no longer second. Here, they're just maybe in the quantum smaller have emerged, and I don't think they're going to go away and I think the small cities will teach the old city some new tricks.

Michael Turner
We don't call them tier two cities. We call them high growth hubs. Maybe that's designed to make us feel better. But if you look at it empirically and I can't help myself, Spencer, because I am a sort of numbers mathematician nerd and so I do look at the data. Clearly, the high growth jobs that you would identify, I would identify are growing faster in terms of population. They're growing faster in terms of GDP growth than the traditional gateway markets. And that has been the case for several years. That is not true just under COVID, it's being accelerated under COVID. So we historically have had a lot of our capital in the Northeast, in the US and over the last several years we've been pushing more of that south and towards the mountain region. And I think this period of time, it's just affirm that thesis in that direction of travel for us. So I think the word for all of these cities is cyclical. And these high growth hubs are going to experience some headwinds as they are now and some downturns, I think, in the overall COVID environment. Spencer, we see the world as two trades. There's the COVID acceleration trade. So everything that we were trying to get out in front of as a trend and thought we had time, that's accelerated. So if somebody criticizes us, it would be for not going fast enough. But the second trade is the COVID reversal trade. And I don't think that hotels are going to stay empty forever. I don't think office buildings are going to stay empty forever. I don't think I'm going to be able to walk down lower Broadway in Soho forever and see that once proud retail corners are now empty, are going to be empty forever. So that will be the covid reversal trade. It will reveal itself in 2021.

Chris Ludeman
As Michael was talking about these big cities and new new cities, but these hyper growth cities that we've all experienced. I remember five, ten years ago there was a real yield premium for the perceived risk to going to some of these cities. And that yield premium has been priced out and it's been priced out not just because all that capital was there, but because those cities have fundamentally changed. And there's a belief that liquidity will not just be opportunistic, that it will continue to cycle through. So, again, it's that part of evolution that we all have to be cognizant of. And one of the advantages people like Michael have, and I guess in a small way that I have this when you travel broadly and you experience cultures and places more widely, your field of vision and your perspective can change dramatically.

Michael Turner
Chris, I've enjoyed bumping into you in cities around the world and that that is one of the joys. If I have to share Spencer of my job, I'm sure it is of Chris's job too. Getting on phone calls at 6:00 in the morning to help somebody out in Singapore or being on a call at midnight because it's more convenient for Sydney. That's not a joy, but understanding and appreciating how small the world is and being able to see trends in one market showing up elsewhere and allocating capital on a relative basis is one of the things that we try to do.

Spencer Levy
As we look into these other markets, and again, every market has their local flavor. One of the markets that Michael, I believe you're looking at is India. Why India? Why now?

Michael Turner
Asia represents, I think, over 50 percent of the world's population, close to 50 percent of the world's GDP, 70 percent of the world's landmass etc. So for us as a global capital allocator and investor, we just have to be there. The growth rates are also a lot more significant than they are in the West, where we're all getting a little more aged and a little slower. And our shareholder, you mentioned them previously, Spencer, they have stuck their toes in the water and made some infrastructure investments. We've spent several years building relationships there on the ground. And I think it's a huge market. English is the common language. English common law is something that we can navigate, although I think it's done in a unique Indian way. And there are a handful of players there that are accustomed to building partnerships with institutional capital and operators. And I think you're able to navigate your way through India now and make a return that you might not have been able to do 10 or 20 years ago. And we're now seeing the first generation exits. So Blackstone has listed Embassy REIT, Brookfield Similarily has aggregated an office portfolio and listed an office REIT. All of these things will add transparency and attract more capital to that market. And I think it's a an attractive place. And we're going to start to put our toes into the waters. They're a little more meaningful in the years ahead.

Chris Ludeman
Maybe sticking on the Indian theme for a moment, I've spent a fair amount of time in India mostly as a learner and to Michael's point, or to expand on his point and think about the expanding middle class. I mean, they're so far behind in terms of their appetite for retail. And if you look at the quality of their developments and they're building these massive retail schemes that we started to do 50 years ago, but they're doing them better and the quality of construction is getting better. I think one of the big things in India, which is similar in many emerging markets, is you think about currency and you think about risks. You think about the rule of law. And how do people if you think about the regulatory environment, to encourage outside investment. What happens if things go wrong? Is there an exit strategy? Is there a place that you can go to for arbitration of disputes? And I think India is learning about those things very, very rapidly and recognizing they're having to change some of their, I would say, legal infrastructure to make sure that people like Michael Turner feel comfortable making it an investment there over a long term. So those are things that are happening in the other, places like India and you could put that in other places. Is there infrastructure was unreliable. You think about their uptime and just basic goods and services like electricity. They've had to work very hard on transportation infrastructure or electricity to make sure that there is basic uptime and they've got the will to do it. They've got a labor base that can do it. And then if you pivot into some of these emerging markets, for instance, in the Middle East, one of the blessings that they have is they're not burdened with old infrastructure. I mean, so they're starting place for putting in infrastructure can not be weighed down by trying to get the last pennies of value out of old infrastructure. So that's gives them while making these schemes are big and they're expensive, sometimes starting from scratch can be more helpful. And you'd see a lot of that in the Middle East, some places in Southeast Asia that are that are going to become markets to deal with.

Spencer Levy
We're all looking for the same thing, which is the best risk adjusted return. And that key word is risk. And the risk factors are things like rule of law, but also the cost of capital going in there. So, Michael, let me ask you two questions. Number one, do you had your money when you go into different countries because not every global investor does. And number two, has the business changed so much that we can manage it through models, algorithms and not physical visits?

Michael Turner
I'll make it really simple, Spencer. As a real estate investor, we don't make decisions about buying or selling real estate based upon the fluctuation of any basket of currencies against any other. So if the rupee was expensive relative to a basket of currencies, would that deter us at this point in time from lagging in? No. If the rupee was high, would that compel us to exit? No. We would still make real estate decisions based upon real estate fundamentals.

Chris Ludeman
I would say that people just think turning on and off a switch, say, like a hedging switch, it's not easy. I mean, it's easy to look at it on a screen, but in terms to execute a strategy, you have to believe that you can understand that that hedging risk over a duration of time. And so we have seen in prior to the hedging cost coming way back in because our interest rates are so low. You know, you just start to see the flow of capital, say, in the United States from Korea, really slow down. The amount of inbound German capital into certain places really slowed down because their hedging costs were up. So they make that decision to stop pretty quickly in order to restart the pump. It doesn't happen overnight.

Spencer Levy
Second question I asked Michael, because this is really a question I was going to start with you and I was going to ping pong the ball to Chris, which is the and I don't want to use this in a pejorative way because I think your models are if they are as accurate as you suggest, a terrific innovation in our business technologically to be able to underwrite so well with desktop models for different markets. So tell us about those models and how much you use them and also this thing about physically visiting the real estate, because that's relevant for times like today when there are so many travel restrictions in place.

Michael Turner
Sure. So I would not be so bold as to characterize our models as you have. So thank you for being ambitious on our behalf, Spencer, but we've got to get there one day. So the models I was describing to you are really what we use for capital allocation decisions. Example being we'd like to be in North American multifamily, why, what markets, what should we expect out of Denver on average over the next three years? I wouldn't take that and expect that to mean we can project what the return will be in Denver for a given year with ninety five percent accuracy. But for most markets, there's not as many variables that are as confusing as you may think. And you can train the heck out of these models, as you know, using neural networks and artificial intelligence. And the back testing would suggest that somewhere between, you know, an r squared off, point nine or higher is pretty reasonable to get for the look forward returns on average for the next three years in a given market. I would never take that to say we never leave our desks, we don't look at properties and we don't underwrite individual rent rolls to make investment decisions. But we will have a view on a market. And if one of our originators says, I want to buy this office building in New York City and it's the first quarter of 2020, we would have to say to them, what's your business plan and what do you see that's different than our own view on the market here? Because you must have some extraordinary execution pathway or we're missing something or again, there more affirmative, we won't debate the merits of multifamily Denver ad nauseum in our investment committee when we've gone through these models and have these discussions at a macro level again and again and again.

Spencer Levy
So at a minimum, it provides a just using a common term of sanity check of, look, your investment idea is different than what the model says. Explain to me why you think your particular deal is an outlier from what the base model is suggesting. That a fair way to put it?

Michael Turner
Yeah, I'd reverse even more. Investment professionals love doing deals and we don't want them chasing shiny objects. We want to have rigorous debate and conversation as to where are we going to allocate our resources. That doesn't just mean money. That means time. That means relationships. That means where we're going to get on airplanes. And not so that our folks are not just chasing this shiny object, but they're actually bringing things forward that are in service of a thesis that we've had which are debated and have tons of human intervention, as well as some econometric and computer modeling.

Spencer Levy
So let's go to the getting on an airplane thing again. I know we've talked a lot about that. And I've met lots of my friends in global airports, too, and it is a cool part of the job. But tragically, during the last nine months, among the many fallouts of COVID-19 is we're not getting on a lot of airplanes. But at the same time, Chris, you and I are aware that several of the large office trades that we're doing right now in markets around the U.S. are being bought by Asian investors from Singapore, from South Korea and elsewhere. How are they doing it if they can't get here?

Chris Ludeman
Number one, we've innovated as an industry. We've kind of innovated around seconding due diligence to trusted advisers. We've innovated around you think about the normal closing techniques. And now we've been able to do many of those things remotely that we always used to have to have people and lawyers and all these people around a common table. In some places that was common. Some places you've been having remote closing for a long time. You think about the advent of really good virtual tours that are live and directed potentially by a conference room that can be several thousand miles away. So you can actually examine that physical plant in a way that we would never, ever allow ourselves to think about. We would never have said that would be a preferred way of doing it. But people do innovate. And what has happened in many of these trades is either with that capital, with, say, situated, its executive capital was in Singapore. They either had delegated inspection or they have used their on the ground resources that they had in some part of the United States by example and seconded it to their own people and trusted them. And then that probably says, as we look at our global organizations, do we have the right talent when we do have to rely on them in a way that we never did before? Can they stand on their own two feet intellectually? Can we trust them? Do they care about the same things relative to excellence that we do? And that will be a thing I think will go back to when things calm down, say, how did my people perform when I needed them to be more than I thought I ever needed them to be?

Spencer Levy
Let me go back to some of these trades again that we've had from Singapore, from South Korea, and we've seen bidders now from Spain. We see bidders from Israel all over the world. And as a matter of fact, I was on a phone call the other day with a globally famous demographer named, Parag Khanna, who we had in our symposium a few years ago, if you remember Chris, and he thinks that the world is going to get more regional and he thinks that we're going to see not only trade but capital flows rather than expanding contracting into the Canada, US, Latin and South America, the Asian sector, the European sector. Michael, do you see that happening?

Michael Turner
I think the era that was so prevalent in much of my career around the integration of everything, technology, supply chains, supranational institutions, so on and so forth, that era is over. There's no doubt about it. That doesn't mean we're all going to go into our caves. The world is too interdependent for that to happen. But we're clearly articulating a new world order. And one of the consequences of that may be that we go to a greater amount of regionalism than globalism. I think that's quite possible. The capital markets are the most global business in the world and they have been long before people talked about globalization. Money has moved around since. As long as you can send it over a wire. I don't see that abating, Spencer. And I think we're in a world where technology is becoming more regionalized because of things like data privacy and governments wanting to express sovereignty over certain things for their citizens. More regions are going to be able to fulfill for their own consumption. We're seeing just in time inventory supply chains be replaced by just in case, just in case there's an interruption. I need a little more slack. That's why God gave you two lungs instead of one. If one of them failed, you can still keep going. We're going to see more of that in parts of the economy as well. And I think that could create some blocks, as you've described in some ways. But we are not going back to a world where there's a wall and it separates those that are on one side versus those are on other in all ways, shapes and forms.

Chris Ludeman
I think regionalization will likely be temporary until people have greater sense of trust, safety and security. So I think that's going to be a reasonable outcome in the near term. But as Michael said, capital flows globally. You cannot stop ideas from flowing globally. You now can stop people or restrain people from flowing globally. But I think that bill is just temporarily wrong. It'll come back. One of the books that has been most meaningful to me that I've read in the last year is the 1965 book written by a guy by named Will Durant, The Lessons of History. If you go through that book, you realize that as well as Mark Twain said, history may not repeat itself, but it surely does rhyme. And and if you look at this book that was written in 1965 and then you reflect on the questions you asked, I think there will find a lot of pretty simple answers.

Michael Turner
I'm going to disagree with my friend Chris, one of his neighbors, not as close to him as a short drive, but a great author, thinker Peter Zeehan, who lives in Austin. And I read one of his most recent books. He's written three or four. It's called Disunited Nations. And his entire thesis is basically, Michael, the world order that, you know, is based upon the US's role, post-World War Two, the Bretton Woods agreement. And we're going to rebuild your nations and you'll have access to our markets and we will patrol the seas against piracy. And you only have to do one thing. You're on that team or my team. And that was the only choice. And that great struggle for values was won with the fall of the Berlin Wall. And now we've been drifting for more than 30 years without the need for America to fulfill that role. I think increasingly without the interest of Americans to want to fulfill that role and without a bank account that can afford to always fulfill that role. So I do see America pulling back, as it has perhaps not as much under the next administration as it has under the current one. But I don't see that being replaced and going back to what I grew up with in terms of my mind and my norms as a kid. And I think the primacy of regionalism is going to be a greater force in the near term than globalism is, in my opinion

Spencer Levy
When I ask the last couple of questions, more enlightening out round fashion. So the first one is what I call the rise of ESG capital, environmental, social governance, capital. I was going to call the other day with a big investor who said that he estimates it was about a couple hundred billion of that capital in the world today, but rising to five trillion over the next decade. Certainly some places like the EU are leaders in environmental policy and certainly social policies now are much more important in the US. Michael, how does Oxford look at ESG capital?

Michael Turner
We've always been a leader in the importance of environmental stewardship, energy management, greenhouse gas targeting. It is growing in importance. Increasingly, it is more important to our owner and our shareholder. And I would not disagree with any of the numbers that you shared. This whole trend of ESG sponsored investment strategies. That may be a trend because ESG is going to end up being prevalent everywhere, every organization, every company. And if you are not fulfilling your obligations in this regard, you're just not going to have any access to capital.

Spencer Levy
Chris, how we advising our clients today on ESG capital? Is it here? Is it growing? And should they make some of these changes that are more expensive to attract?

Chris Ludeman
Well, as you indicated in your introductory remarks to the question, the EU is there in the sense that it's that it's the tip of their tongue on top of their mind, and that's how they're behaving. We're behind in Asia is further behind us. But I would liken it to when we were thinking about green buildings. It used to be, oh, gosh, if I take do what it takes to put the capital to make this thing certified, will I get a better rent? The answer typically is you may get a bigger audience. You may not get a bigger rent. But if you fast forward over the past decade, that's really become table stakes and anything that's new that's coming out of the ground, it's got those characteristics. So I think it's a wave that's coming. I don't think it's a temporary thing. I believe it's just going to happen sequentially. But the timeframe for getting these things done will be compressed. And if we ask that question in five years, people say, yeah, and what about it.

Spencer Levy

Two more questions before final thoughts. One of them is flex space, the future of that space, more or less of it. And the second work from home. How much, if any, does it diminish office demand? So Michael flex and work from home?

Michael Turner
I think Flex will become more prevalent. I think organizations have found the benefits of being able to flex their footprint. So I think it's going to grow in prevalence.

Spencer Levy
Work from home. How much does it impact the office business overall?

Michael Turner
I think it's a net headwind to office space. The cram more persons per square foot of space that we've seen for twenty years. That's stopped and that will reverse and some of that reversal will be offset by a more flexible workplace environment.

Chris Ludeman
I agree with Mike on his views of flex space. What I am experiencing in talking with a wide spectrum of people and then listening to others, that would be experts. I think the initial gains on productivity, working from home employee engagement, working from home, which were quite high in the early parts of the pandemic, are quickly wearing thin. People are feeling isolated. I think they're feeling detached. I think they're feeling lonely. They're feeling less productive and a little bit shiftless. And so consequently, I think the early gains, we're going to give back some of those gains. And once there is a an environment that allows us to be safe and secure and believe in mass transit in those cities that have them, I think you're going to see a snap back to office occupation, notwithstanding the fact that I do believe those spaces will be less dense for the foreseeable future.

Spencer Levy
Last question, final thoughts. 2021, Michael. Optimistic, pessimistic. What's your point of view on 2021.

Michael Turner
Uneven. So, look, I'm quite optimistic after you've fallen down a hill, smashed your teeth, broken your legs, hit your face and you get to the bottom of the valley, the one thing you get to look forward to is coming out the other side and looking up. So we've all fallen down the side of the hill. So that would make me in general, optimistic. You know, Spencer better than I do, that certain sectors of real estate lag and some of those legs are going to take another year or two to play out. But we're now at a point where we have the ability to believe that tomorrow is going to be, in general, a better day than today. And that in and of itself is going to unleash some animal spirits. And that makes me an optimist.

Chris Ludeman
I would bifurcate it and I don't know where the middle place to the bifurcation, but I would say I think the second half of 2021 will be materially better than the first half of 2021 I think. We're starting to see evidence in our numbers of people coming off the sidelines, so I think 21 generally would be better than 20. But I think the latter, a lot of 21 will be substantially better than the first part.

Spencer Levy
Well, on behalf of The Weekly Take, I want to thank two friends of mine, Michael Turner, CEO of Oxford Properties. Michael, thank you for joining us.

Michael Turner
Spencer. Thank you.

Spencer Levy
Chris Ludeman my good friend, second time guest, great leader of our Global Capital Markets Group. Chris, thank you for joining us.

Chris Ludeman
Spencer, thanks for making it happen. Michael, good to be with you.

Michael Turner
Nice to see you, too, Chris. It was it was a fun chat we had.

Spencer Levy
For more on our show, check out CBRE.com/TheWeeklyTake. You can also find our new Viewpoint observations from the front lines, which covers today's topic, a deep dive analysis into the global capital markets and their recovery. We'd also love your feedback. So if you found us on Apple podcast, Spotify or another platform, please subscribe rate and review us wherever you listen. Once again, thank you for joining us. Until next time I'm Spencer Levy. Be smart. Be safe. You will.



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