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Current Season: First Draft Live
Between economic whiplash, shifting policies and market volatility that changes by the hour, you need industry insights that cut through the noise. That's exactly why we're launching First Draft Live, a new weekly series that breaks down what's happening, why it matters and what you need to know to do better business.
Join us live on Bisnow.com every Friday at 12:30 PM ET / 9:30AM PT for conversations with the industry's sharpest minds discussing the week's most critical stories, or catch the replay right afterwards — here on your podcast app of choice.
Okay. Welcome to First Draft Live. I'm Mark Bonner, Biznail's editor in chief coming to you live from New York. It's Friday, November 21. Let's be honest about the kind of year we've been living through.
Mark Bonner:2025 hasn't just been unpredictable. It's been unrecognizable. As we all know, the forty three day federal shutdown didn't just close Washington. It blacked out the nation's economic dashboard, halting permits, freezing HUD pipelines, and left every lender and investor navigating without CPI, jobs, or inflation data. We covered all of that last week, so go check it out.
Mark Bonner:But at the same time, US tariffs climbed to their highest sustained level since the nineteen thirties, pushing up cost on metals, machinery, and core construction inputs. Rate cut expectations have flipped back and forth all year as inflation ease, then reaccelerated, then eased again. Who knows what we'll see in a few weeks, from the central bank. And the capital markets, they've thawed barely. SEER reinvestment activities are modestly from 2024, but still far below pre pandemic norms.
Mark Bonner:And deals are clearing only after heavier scrutiny and wider spreads. On the fundamental side, the picture is just a split. Industrial and data centers remain red hot. Retail has held its footing. Multifamily strength depends entirely on local supply and insurance pressure.
Mark Bonner:And office, at least nationally, is still sitting near record high vacancy levels around 20% with values still searching for a floor. So in other words, the signals we've relied on for decades didn't just flicker this year, they have failed. And that's exactly why today's show matters. Few people understand this moment better than Peter Leniman. He's not just an economist.
Mark Bonner:He literally wrote the book on commercial real estate. And on a personal note, his BizNow video education series trained an entire generation of CRE professionals, myself included. So thank you, Peter. And he spent his career studying how markets behave when clarity disappears and discipline becomes the only real compass. Peter, welcome to First Draft Live.
Peter Linneman:Thank you for having me, Mark. Great pleasure to be here.
Mark Bonner:Pleasure's all mine. So Peter, before we get tactical, I wanna pull the lens back a bit. For years, I've heard the most seasoned people in this industry say, I've been through this before. We always come out on top. And sure, experience matters.
Mark Bonner:Discipline matters. Long memories matter. But tough periods also separate the field. Some players rise above it, some disappear, sometimes spectacularly as we've seen. But this year feels different.
Mark Bonner:The shutdown blacked out the data we rely on, tariffs spiked to levels we haven't seen in generations, rate expectations continue to royal, fundamentals contradicted each other. The usual signals just broke. So let me ask you this. Have you ever seen a moment quite like this in your career? And if not, is there a far off chapter in economic history, maybe one most of us have forgotten, that you think is actually instructive to this moment?
Peter Linneman:I think it's a great question. I think that every moment I've lived through, I'm 74, I've been in the business a long time is different. Right? Everyone's different. There's craziness in an odd way.
Peter Linneman:You talk about the absence of data to analyze. When I began in this business, no one analyzed data, and there wasn't data there to analyze. And yet there was still an industry. Right? And I'm not saying it was as efficient, but there was still an industry.
Peter Linneman:And as an analogy, before Black Scholes formulas existed, people traded options. Right? Black Scholes made it easier. So in a way, it's not so unusual to have foggy data. It's not so unusual to have limited data.
Peter Linneman:One of the things that I did during this blackout of some data I'd always viewed trying to figure out the economy the real estate framework etcetera like looking at, I don't know, a Monet painting. No brush stroke means anything in and of itself. None. All of them taken together when viewed from an appropriate distance matter a lot. Okay?
Peter Linneman:I can't tell it's a cathedral if I'm too close. I can't tell it's a cathedral if I just look at a brush stroke. And I think one of the things I do that a lot of people don't do is look at a lot more brush strokes. So what happened, and you're right, it was frustrating not to get employment data and it was frustrating. I still had a lot of brush strokes.
Peter Linneman:So you can imagine some of my brush strokes disappeared. And I then tried to squint. You know how you kind of squint to try to see what the picture is. Could I see it as clearly? No.
Peter Linneman:I'll give you this actually is coincidental, but it's true. Yesterday, the employment data came out and everybody was holding their breath and I happened to be on the phone with a very close friend and he says the data just came out literally said the data just came out how many jobs were added last month and I said 120. I didn't know the answer And I said 120,000. And he said, you're wrong. It's 119,000.
Peter Linneman:Now, it's not that I'm that precise. But yeah, I lost some brush strokes, but there were still enough there. When you don't have when you do have uncertainty, it becomes more important to go beyond the norm. What's going beyond the norm? I talk to more people about how's it going?
Peter Linneman:I mean, how's it really going at your apartments? Forget the data. Right? How's it really going in your apartments? How's it really going in your office building?
Peter Linneman:Reading the public company's earnings reports, listening to their earnings. Because all those are just little brushstrokes. Right and you can't just rely on the BLS set right and so it is uncertain. You mentioned the tariffs. I've never seen anything like this in my lifetime on the tariffs either in terms of the magnitude or the uncertainty.
Peter Linneman:Either one would be challenging, right? The magnitude would be challenging And the uncertainty would be challenging, but we got both of them on tariffs. And imports are roughly 10% of the economy. So one of the things and I'm just trying to give you a framework for people listening how to think about this. So why wasn't the economy more slowed?
Peter Linneman:It has been slowed, but the economy basically shouldn't be growing if the tariff impact was as high as you can simulate it to be. That is things coming from China like this or tax like that and so forth. So I went and did a very simple analysis last week. Just this is real time last week. I took the actual tariffs collected by the US government over the last six months and divided it by the actual imports recorded.
Peter Linneman:You can think of that as an average tariff. Right? You're collecting how much on what base. All the simulations say the tariff rate should be about sixteen to eighteen dollars per 100. When you divide the actual tariffs paid by the actual imports, it's about 6 and a half dollars.
Peter Linneman:And that's up from $3, so it's up. It's up from $3 to 6 and a half, but it's not 18. And that's why the impact is not as big. And you say, well, how can the simulated be 16% to 18% in the actual? And that's because people adjust.
Peter Linneman:And so what I'm trying to do is analyze people adjust. The impact's not as big as it might first appear because people, when it rains, you put up an umbrella. When it rains really hard, you try to get under an awning. When it rains really, really hard, you go inside. That's the difference between the 16 and a half 16 to 18 and the six and a half percent.
Peter Linneman:So your point is brilliantly on target uncertainty, but you gotta try to go and do some different things than you might normally do to get a little better clarity.
Mark Bonner:Yeah. I mean, look, to take, your metaphor of Monet brushstrokes, I would say we have had brushstrokes. There haven't been from Claude Monet. They've been from Jackson Pollock. Right?
Mark Bonner:And that is and that and that has introduced chaos into the overall thinking here. And the reason why I go back to the history is because try as I might, Peter, I cannot I'm not smart enough to know what period in economic history this most resembles and whether or not that period in time can tell us something about this moment. But I'm kind of hoping that you can instruct us on what this moment means in the grand arc of your career.
Peter Linneman:So what drives home are fundamentals. Look at fundamentals. Don't get caught up in what are fundamentals. There are incentives not to import. Right.
Peter Linneman:And people respond to incentives. So yes it's going to drag the economy but not as much. Capital markets. The Fed has been crazy any number of times over history sometimes too high sometimes too low always too late. But but the economy goes on.
Peter Linneman:So when the Fed had interest rates too low the economy went on. And when the Fed had interest rates too high over my career, economies go on, and it adjusts. Doesn't perfectly adjust. It adjusts. The key is watching the adjustments.
Peter Linneman:And by what are the adjustments always revolve? Think of taxes. People respond to tax rates. And I think what people forget is to look at the responses people are making. That's far more interesting than what they're responding to.
Peter Linneman:We can't solve the Fed keeping interest rates too high. We can't solve the Fed be uncertain about three weeks before two and a half weeks before they're gonna make a rate decision. They're still, you know, mealy mouthing. Right? We can't change that.
Peter Linneman:We can adjust to it and watch the adjustments. What are the adjustments people are making? The adjustments people are making are borrowing less. Right? Because you don't know what your cost of capital is going to be.
Peter Linneman:Is this a moment to lock in long or lock in short when you don't know borrow a little less and and so those are the things I think to focus on are the adjustments more than the impediments. Talked about office uncertainty. Look at how people are adjusting more than the impediment, which is nobody knows how much space they need.
Mark Bonner:Right. And then meanwhile, with all of this uncertainty that we're talking about here, there's mispricing, right? Some industrial markets are trading at pre pandemic pricing while office values to your point in several major metros continue to slide. Retail looks stable. Data centers look unstoppable.
Mark Bonner:We'll talk about data centers in a second. Multifamily is turning to a tale of two Americas depending on supply pipelines and insurance costs. Where is where do you think commercial real estate is clearly overpricing this fear and uncertainty?
Peter Linneman:Overpricing. I don't think there's a lot of sector where real estate is overpriced. Certainly not office. Certainly not good office is overpriced. I don't think multifamily is overpriced quite the opposite.
Peter Linneman:I think most multifamily is underpriced compared to its performance. Industrial, more or less correctly priced. I think hotels are being underpriced and that people are waiting for the next shoe to drop. The uncertainty phenomena, they're kind of they're overweighting the uncertainty in the pricing, And there's a lot of short term money. So when there's a lot of short term money that uncertainty weighs more heavily.
Peter Linneman:Retail, around right pricing, I think retail has the advantage right now. Good retail in that five years ago everybody thought nobody would go to a physical place right. Was it was all going be done online by now. Yeah. And Covid proved that's not going to happen.
Peter Linneman:And so people now look at good retail as a good cash stream. And then as you say, data centers are a whole new game, whole new game.
Mark Bonner:Well, let's talk about data centers, because I mean, you want to talk about uncertainty, Right? There it is right there. On one hand, you've got a turbocharged, situation where trillions of dollars are anticipated to go into this over the next five to six years. Billions upon billions have have already flowed in. It's red hot, but it's also red hot on the other side, in terms of the fear, worries about a bubble, the local politics that continues to be a headwind, the power supply issues.
Mark Bonner:And so this bubble thing continues to bubble. I mean, even within twenty four hours or less of NVIDIA punching way above its weight class, which is the biggest weight class there is in in the financial world. Then the stock market did its thing the next day because it still has fear. Let's get to a question from our audience on this front, Peter. Can you address all the noise surrounding whether we are in a data center development bubble?
Mark Bonner:What is your take on this?
Peter Linneman:Okay. So let's take the the supply side. Right now, the margins for developing data centers, because there is a lot of money out there, and there's not a lot of supply. Right now, the margins are probably four times normal. Now in my career, anytime margins are four times normal, there's gonna be a lot of supply sooner or later.
Peter Linneman:Right? So somebody's gonna get caught out. So right now, it's terrific. If you can come up with the capital, there are tenants that wanna be there. Even if you do it spec, there are tenants who wanna be there.
Peter Linneman:So if you can get over the hurdle of power, you can get over the zoning and so forth. There are tenants out there, and they'll pay up. I'm not worried so much about now. I'm worried about the supply that brings about. And that supply, I just don't normally see things with four times normal margins.
Mark Bonner:When do you think that moment's going to come?
Peter Linneman:It will take probably three to five years, and partly because the amount of money that's associated with the data set. It's not like you're building a $12,000,000 warehouse. So you have to tap some enormous pools of data, assuming of dollars to to do it. And a tap, as you know, and your listeners know, tapping is one it's hard enough to get $12,000,000. Now try to get $2,000,000,000.
Peter Linneman:That's hard. And just think of something as simple. Here's what's going to make it slower. And here's why the margins are big right now. The margins are big right now.
Peter Linneman:Let's suppose you have a $2,000,000,000 project. And let's suppose you can find banks who are willing to do a billion dollar. A billion dollar bank syndication is a huge load. It's not easy, especially if it's spec. You have no lead tenants.
Peter Linneman:And I still need a billion of equity. That's not easy to come up with a billion of equity for a spec project. The fact that it's hard to raise that capital is gonna make it slow, but the capital is going to respond to the margins. But it's not gonna respond overnight. It is gonna take several years.
Peter Linneman:People are gonna make a lot of money on the development over those years. Yeah. But watch the musical chairs when the supply finally gets there.
Mark Bonner:Is the institutional lending on this gonna be the signal to the noise? I mean, if they begin to pull back a bit on the capital stack to limit their downside risk, I mean, is that really what we're looking for here?
Peter Linneman:That's where it'll be. That's that's clearly where it'll be. My guess is you're going to get one more fit. Right now you have bank syndicates kind of leading it. They're gonna run into limitations on their balance sheet.
Peter Linneman:What are they then gonna do? They're going to securitize it. Right? Once they securitize it, because that's a bigger syndicate than just eight banks. Right?
Peter Linneman:They're going to securitize it. Once they securitize it, you know the next things are going to cut it up into triple A, double A, single, etcetera.
Mark Bonner:Yeah.
Peter Linneman:You know that in the beginning that will be tightly underwritten and you know at the end that will be loosely underwritten. And that's where the music ultimately will end because the banks will go only so far on their balance sheets. They'll go broader by by doing it as securitization. It'll be well securitized in the beginning and poorly securitized at the end. And I think that's about a four year journey.
Mark Bonner:If you're just joining us, this is First Draft Live. I'm here with Peter Lindeman, the guy who literally wrote the book on commercial real estate, talking about the word of the year, uncertainty. Peter, let's go to another question from our audience. Is the new normal in CRE, at least for the foreseeable future, a period of prolonged uncertainty driven by several factors, most notably the policy direction coming out of Washington?
Peter Linneman:And I would include the Fed when you say the policy direction. I wouldn't limit it to simply the White House in Congress.
Mark Bonner:I mean, the White House is trying to dictate Fed Right. Federal Reserve policy, as we all know.
Peter Linneman:I would include the whole thing. And by the way, I'd go even one step further. As you know, there's a number of court I'm not a legal expert. There's a number of court cases about tariffs in front of different courts that will presumably end up in the Supreme Court. So there's the uncertainty of what the White House will do.
Peter Linneman:There's the uncertainty of what Congress is gonna do in reaction to that. We've got elections coming up next year that will maybe change the balance there. You've got a Fed that's kind of been not the most transparent and the most on target. And we have all these court cases swinging around. Take something as simple as not simple something as basic as immigration.
Peter Linneman:I had a friend I made a comment about four months ago that you're gonna see some very publicly prosecuted immigration case right and it will slow immigration and I had a friend who said, especially if we're gonna do a one court case at a time and that's not quite what we're doing, but you tell me the transparency on where immigration law comes out on. I'm not a legal expert. Many of these things have never been litigated in this way. Stay tuned. And yet that has a big impact on inflow of labor, inflow of people.
Peter Linneman:What will that do to labor markets? So I'd say most of the uncertainty we have comes out of Washington, which is legal. Judicial legislative administrative and the Fed. Lots of uncertainty coming out of there and what we're doing is reacting to it. Now, here's the good news if people can react if Turkey, the country, can grow amid all the uncertainty that economy constantly has, we'll do okay because we're more resilient, more transparent.
Peter Linneman:Would we do better without all this uncertainty? Absolutely. Absolutely.
Mark Bonner:So, I mean, is uncertainty the new certainty? I mean, can you bake in this idea that we're gonna be on this bumpily, wobbly Jackson Pollock canvas? Can is that a loan because that's something that you can actually bake into your thinking?
Peter Linneman:Well and that was kinda my point about Turkey. Turkey has baked it in. Their businesses are baked in. We don't know what the hell the government's gonna do right. We really don't we have always baked in some degree of that right we we've always baked in some degree of that.
Peter Linneman:We just have a lot more of it now than normal. We bake it in. Businesses operate. They give themselves bigger margin cushions, but it does slow the economy down. It is the new world.
Peter Linneman:It'll probably go on and at least until after the election. At least until after the election.
Mark Bonner:After the midterms?
Peter Linneman:The midterms. Yeah.
Mark Bonner:Got it. Mean,
Peter Linneman:tell me what happens in the midterms. Let's suppose Trumpism gets totally defeated in the midterms one one path is gonna happen. You tell me Trumpism gets totally reinforced at the midterms a different path will occur And I don't know which.
Mark Bonner:Let's go to another question from the audience. Why are apartments underpriced when most rents are flat or declining and expenses are increasing, especially for insurance?
Peter Linneman:I think capital markets have gotten there's a false narrative that's hurting the capital markets. There was remember, like seven years ago, the false narrative was no one will ever shop in a shopping center. And you go, that's not true, and it hurt the capital markets. The false narrative for apartments is that since rents are flat and occupancy is a bit soft, demand for apartments must have weakened. And that's, you know, that's not the case.
Peter Linneman:Demand has stayed just fine. It's just that it got spread over a bigger supply. And that's what made things that's what swung things from being very robust to very weak. And I don't think the capital markets have fully figured out that it wasn't demand. It was all supply.
Peter Linneman:Demand has stayed strong. Single family housing is way under produced. That's the best thing that could ever happen to multi. That's not gonna go away. And as supply pipelines and as you know, in every market supply pipelines are getting shrunk.
Peter Linneman:We still grow. We still have more people. We still have more income and we have single family getting more and more expensive because we have a shortage. I think what you're gonna see is that narrative change in 2027, 2028, and you'll see a rebound in pricing, not unlike what you saw in retail as people realized, oh, a public's anchored shopping center's not going to become a ghost town.
Mark Bonner:So what's your outlook on multifamily? Ten years. I know that's a big it's a it's a big question.
Peter Linneman:Ten years, you'll do an unlevered return on a portfolio of multifamily around 9%, nine and a half percent. That's my prediction. How you get there? Unlevered. Let's because the leverage makes it a different game, but you're gonna get there and that you're gonna get a 5% yield coming out.
Peter Linneman:You'll get growth of several percent a year from inflation. You get growth of 1% or so beyond inflation in values because construction costs go up faster than inflation. And you sit down and you do the math, and you get nine to nine and a half percent over a ten year period with uncertainty and volatility in between. Okay? You lever that up, and depending on how much, you're gonna convert that nine to 9.5 into, at low leverage, 10 to 11.5%.
Peter Linneman:At 60% leverage, you're gonna take it up to something like 12 to 14%. Hard to get a lot higher leverage than that, but you can. And of course, as you push the leverage higher, you run the risk that you get squeezed on a moment and you won't be around to realize that return. Whoever is gonna come in and grave dance on you is gonna realize it. So there's no free lunch.
Peter Linneman:But, yeah, that I have pretty clear transparency on that as a pricing and as a return on multi.
Mark Bonner:So let's talk capital just for a second. Capital has not disappeared this year, but it has gotten pretty cautious. The quiet story is that it's not wait and see for some players. The most sophisticated capital has probably already started positioning for 2026 and maybe even beyond. Peter, where is capital actually flowing?
Mark Bonner:Not talking about where it's flowing, but where is it actually being deployed right now?
Peter Linneman:So it's doing the same thing it's done in every cycle, capital cycle I've witnessed. It pulls back. Each time it pulls back for a different reason. It may have been the war in The Middle East in the seventies, and it could be a terrible economic crisis in the early eighties. So whatever 09/11, each time it pulls back, when it comes back, it has the same DNA.
Peter Linneman:It starts with the safest assets in the most liquid markets with relatively low leverage, and it flows into that. And then you can almost think about it as a waterfall and those markets get back to normal. Those those real liquid real transparent high quality get filled up and not even like a waterfall. What is this where they do champagne glasses you know and it keeps flowing down the think of it that way you know you start with the top champagne glass and then it flows to the next level. Yes.
Peter Linneman:Some drips to the third and some drips to fourth. It then gets to the highest quality and the secondary less transparent markets, and then it gets to the secondary assets in the most transparent markets and and and and it finally gets and we've seen this every time it finally gets to the run of the mill. I don't mean that in a bad sense the run of the mill assets and run of the mill submarkets it finally gets to and they're always the last to realize it. So where's the money going now to the best ask think of office. It's pretty transparent if you wanted to get money for office right now, you would want to have the best buildings best in terms of occupancy, right, and tenancy and lease up.
Peter Linneman:You'd want to have the best buildings in New York, in the best submarket of New York. And if you had the best building in New York, the best submarket in New York, you can get capital. It's flowing there now move down the food chain, not so much If you have apartments in the good submarkets, it's flowing there. It's down to the second and third levels of the champagne glasses for multifamily, but not all the way down. Industrial, if you've got Amazon as your tenant, you're doing just fine from a capital market point of view.
Peter Linneman:It's as you move down and you have a 50,000 square foot. So just think of that champagne what do they call it? Like tree. I don't know what they call it, but you know what I'm talking about.
Mark Bonner:I know you're talking about. But Peter, not everybody operates with the cream of the crop. Right? Not everybody's playing in New York City in the in in, you know, in the Financial District or Midtown, where the strength of The US office market rests, at least historically, not everybody's able to play in the top asset classes. And even if they are playing in the top asset classes, they're not maybe they're not playing on on the map, where where where it's the hottest.
Mark Bonner:You know? As you've taught us through your videos, there's a thing called class b and class c, and I know that's eye of the beholder. But, I mean, what do you do if you're not able to play in those very Tony corners of The US real estate market?
Peter Linneman:So and most of us don't play in that. Right? I mean
Mark Bonner:Right.
Peter Linneman:Most of us don't play. I think the most critical thing if you're going to be an investor or an operator in the normal levels, You know the there are many more glasses on those bottom two rungs than there are in the upper rungs right. It's another way of saying it you have to have patience. You gotta wait till it gets down to you. That means you've got to go in with less leverage.
Peter Linneman:You've got to go in with a strategy of longer hold if you're in those not top quality. One of the things being the top quality affords you is the luxury of, if you want, higher leverage and, if you want a shorter hold period, but I think you're 100% right now. Counseled a lot of people over the years if you're in these lower rung, I don't mean lower and in a bad sense just think of it in the flowing down of the capital. You just have to have strategically a longer hold and you have to have strategically more impregnable capital structure, which means you have to have more equity because that's the only way you and longer debt. Right.
Peter Linneman:More equity.
Mark Bonner:Right. And you and you're touching on I I wanna end on this last night. I know we're little over, but this has been a wonderful conversation. Uncertainty doesn't just break models. It breaks decision making.
Mark Bonner:Committees freeze, timelines slow, everyone waits for certainty that never arrives. I feel like this has been the story every year since the pandemic began.
Peter Linneman:And
Mark Bonner:yet, historically, the investors who outperform in certain periods aren't the ones who wait. They're the ones who act with discipline while others hesitate. But Peter, there's a lot of fear and it's been built up over the last five years since we've been in this pandemic. Do I move now or do I wait? This quarter or next quarter?
Mark Bonner:Survive to '25, bliss to '26, heaven in '27. You know, all these ridiculous, things that have been said by the industry, it's a lot of wait and see. Right? No one wants to be the first one through the wall necessarily. How do you get past that psychology when you're dealing with all of these things that are happening that you're talking about?
Peter Linneman:One of the challenges is the horizon, the investment horizon of more and more capital has gotten shorter and shorter. Just think of private equity funds, They're kind of three to five year models, not all of them, but they're sort of three to five year models. You better be able to time to get a three to five year model working. People are not paid to take risk when others aren't taking it. And that's one of the reasons so much money is sitting aside.
Peter Linneman:You say, oh, they're paid to take risk. No. They're paid to take risk when others are taking risk, not just to take risk. And when no one's doing anything everybody sits. That's when the opportunities are greatest.
Peter Linneman:I'll give you a I think this is a good thing for people to end. I think it's a good time to act if you can hold. If you can hold. I think it's not a great time to act because of all the uncertainty if you have a three to five year window because you could get caught out on it. Think of it this way and and I'll and I'll give you a backup to this if you're going to hold a property for thirty years, think of an apartment building, you're going to hold it for thirty years and you think the first year it's gonna give you a 6.2 yield on cost.
Peter Linneman:Okay? And it comes out of the ground. And because the market's weak, you only get a 5.7 yield on cost. If you're trying to hold that three years, you're dead. You're dead on that difference.
Peter Linneman:If you hold it for twenty years, the performance of that asset over twenty years has almost nothing to do with whether it was a 5.7 in the first year or a 6.2. It's about all the things that happened in the other nineteen years in the capital markets and so forth. And you need capital and courage. You need both. You need capital and you need courage.
Peter Linneman:Short investment horizons make you not courageous they just by they should make you not courageous and I was at an event that I kind of host. And we are talking about development in June with a big group of people and most of the three to five year investment money was saying no, I'm not invest. I'm not developing. I'm not developing. I'm not develop Very interesting.
Peter Linneman:Five ultra ultra wealth families were in that group, though. All five of them were developing. All five of them said basically what I just did. We're gonna own this for twenty years. We think it's a great location.
Peter Linneman:Think construction costs are you know reasonable. We don't know whether it's gonna be a 6.2 coming out of the ground or a 5.7. We would prefer it to be a 6.2. We have low enough leverage. We're gonna slide and it was very interesting.
Peter Linneman:All five ultra high wealth families were developing now why they happen to have courage and they have capital. The there are people out there with courage, but they don't have capital. And there are others out there whose short investment horizons have understandably and correctly made them not courageous. But when everybody else starts jumping, it'll be like the wildebeest in the crossing the river. They all jump in.
Peter Linneman:And I land by saying I was I I I have a charity effort over in Kenya and I go every year and we see the wildebeest crossing the Mara River and I was there about fifteen years ago with someone who was a major major banker, a major major banker and the wildebeest to and fro to and fro don't cross don't cross don't cross and then they go like hell like you see in the movie. And she looks at me and says they're goddamn bankers. Sooner or later the wildebeest will grow.
Mark Bonner:Bold prediction for 2026.
Peter Linneman:The will the beast will start jumping.
Mark Bonner:Well said. Okay. Peter, thanks for taking the time. We really appreciate you.
Peter Linneman:My pleasure. Thanks for having me.
Mark Bonner:If you missed any part of this conversation or wanna catch our earlier episodes, you'll find every show on biznow.com or in your favorite podcast feed. Just search First Draft Live. We'll be back next week. Until then, this is First Draft Live. Have a great weekend y'all.