THAT SO LOOP NET IS ONE OF THOSE PROPERTIES THAT DEALS IN THE COMMERCIAL SPACE WHAT ARE YOU SEEING ACTIVITY-WISE AS OFFICE HAS BECOME DEPRESSED AND PEOPLE NEED TO MARKET PROPERTIES BUT PERHAPS ARE RELUCTANT TO SELL AT DEPRESSED PRICES HOW IS THAT TRENDING RIGHT NOW >> YES, FOR SURE SO RIGHT NOW EXTREMELY DIFFICULT TIME IF YOU ARE IN THE OFFICE SECTOR YOU HAVE THE HIGHEST VACANCY RATE EVER. YOU HAVE A SUPER HIGH PHANTOM VACANCY RATE IT DOESN'T MATTER -- SPACE IS LEASED NO, ONE IS OCCUPYING THAT SPACE, BANKS WILL NOT CONSIDER THAT VALIDLY LEASED SPACE. SO WE ARE AT THE HIGHEST VACANCY RATE AT 13.1% AND IF YOU TAKE PHANTOM VACANCY, WE ARE AT 56% VACANT, WHICH IS UNPRECEDENTED IN HISTORY THAT WOULD ECLIPSE, SAY, THE GREAT DEPRESSION SO, OBVIOUSLY, PEOPLE NEED TO MARKET SPACE THERE ARE STILL LOTS OF DEALS IN THE MARKET THERE ARE TRANSACTIONS HAPPENING. PEOPLE THINK THAT THE WORK FROM HOME PHENOMENA IS UNIVERSAL, BUT OUT OF 160 MILLION PEOPLE EMPLOYED IN THE UNITED STATES, 145 MILLION ARE SHOWING UP TO WORK, PLACE OF WORK EVERY DAY. SO 90% OF THE WORLD IS GOING TO WORK, AND IT IS CONTINUING TO BIT BY BIT TRICKLE BACK TO MORE AND MORE PEOPLE COMING BACK TO WORK, SO LOCATION DATA, CARD SWIPE DATA KEEPS MOVING AHEAD. HOWEVER, A TRICKLE DOESN'T FILL A POOL VERY QUICKLY. >> MAYBE NOT QUICKLY ENOUGH. >> AND NOT QUICKLY ENOUGH. >> FOR CERTAIN LENDERS IF I WERE TO SAY TO YOU, WELL, THIS MUST MEAN THAT CERTAIN REGIONAL BANKS THAT HAVE A LOT OF THESE OFFICE LOANS ON THEIR BOOKS ARE IN SERIOUS TROUBLE AND THE MARKET IS NOT PAYING ENOUGH ATTENTION TO THAT, YOU WOULD SAY WHAT >> I WOULD FIND IT DIFFICULT TO ARGUE WITH YOU SO IF YOU LOOK AT WHERE WE ARE RIGHT NOW IRK WOULD SAY THAT THE TREND STARTED TO TURN HARD SOUTH IN '21 WHEN PEOPLE BEGAN TO REALIZE THAT WORK FROM HOME WAS GOING TO BE MORE THAN A TEMPORARY THING AND PEOPLE BEGAN RE-EVALUATING. SO WE ARE NOW IN YEAR TWO OF A DISLOCATION IN THE OFFICE MARKETS, AND WE ARE -- THE FIRST HALF OF THIS YEAR DIDN'T HAVE A LOT OF CMBSs COMING DUE. SECOND HALF OF THIS YEAR YOU HAVE A HIGH NUMBER COMING DUE, AND INTO '24 AND '25 TYPICALLY, IF YOU GO BACK TO THE RECESSION OF '07, YOU BEGAN TO SEE DISTRESS OR DEFAULTS IN 2009 BUT YOU DIDN'T SEE LIQUIDATION REALLY UNTIL '11, '12, '13 WE ARE IN THE VERY EARLY STAGES OF THAT, AND YOU WILL LIKELY SEE THINGS BEGIN TO DEVELOP THE LATER HALF THE YEAR. THERE IS NO QUESTION WITH A 50-SOME PERCENT EFFECTIVE VACANCY RATE, A LOT OF THESE LOANS ARE NOT GOING TO BE REFINANCED VERY FEW WILL BE REFINANCED. SOME REAL ISSUES THE FED HAS SAID, YOU KNOW, IN A FORMAL WAY, PRETEND AND EXTEND, IF YOU BELIEVE THE LOAN CAN BE RESTRUCTURED OR FIXED. BUT I THINK THAT'S GOING TO BE DIFFICULT AND I THINK YOU ARE GOING TO SEE SOME MATERIAL DEFAULTS ONE OF THE NEGATIVE FEEDBACK LOOPS THAT CAN OCCURS, WE HAVE A PLATFORM WHERE A LOT OF PROPERTIES ARE SELL OR TRANSACT ON LINE FOR BROKERAGE FIRMS. I SAW A DEAL YESTERDAY, THE OWNER WAS IN THE OFFICE BUILDING AT 35 MILLION PURCHASE PRICE, HAD A RESERVE OF 27 MILLION, SOLD FOR 11 HIM. IT'S NOT ATYPICAL TO SEE 30, 40 CENTS ON THE DOLLAR FOR OFFICE BUILDINGS AND THE SORT OF SELF-REENING NEGATIVE LOOP IS THAT OWNER WILL BE ABLE TO STEP INTO THE MARKETS AND PROFITLY MARKET SPACE IN THAT OFFICE BUILDING FOR HALF OF THE COST OF THE COMPETITORS, WHICH EX ASSERS BAITS THE PAIN FOR OTHER FOLKS WHO HAVEN'T GOTTEN THE CYCLE THERE IS A WAY TO GO THERE. >> SOUNDS LIKE WE ARE ON THE CUSP POTENTIALLY OF A DOWNWARD SPIRAL YOU ALSO HAVE APARTMENTS.COM AND HOMES.COM, WHICH IS GROWING GANGBUSTERS NOW, DIRECT COMPETITOR TO ZILLOW AND THE LIKE WHAT ARE YOU SEEING ON THE RESIDENTIAL SIDE AND HOW ARE YOU ABLE TO GROW AT A TIME WHERE THE MARKET DYNAMICS ARE, AS ONE INVESTOR DESCRIBED EARLIER THIS WEEK, STAGFLATION WHEN IT COMES TO HOUSING >> IT'S A GOOD TIME TO BE A NEW ENTRANT IN THAT MARKET WE ACQUIRED A COUPLE OF SMALL PLAYERS AND REWROTE THEIR SOFTWARE AND BUILT WHAT WE BELIEVE IS A BETTER PRODUCT. WE ARE THE FASTEST GROWING RESIDENTIAL PORTAL MAYBE NUMBER SIX, SEVEN LAST YEAR, WE ARE NOW NUMBER TWO IN TERMS OF TRAFFIC, IN TERMS OF RESIDENTIAL, YOU KNOW, RESALE RENTAL. AND WE WERE ABLE TO DO IT BECAUSE WHEN YOU HAVE NO SHARE -- THE SHRINKING SIZE OF THE MARKET DOESN'T IMPACT YOU GROWING INTO A NEW OPPORTUNITY WE BELIEVE WE BUILT A BETTER PRODUCT, YOU KNOW. WE ARE MORE TRANSPARENT. WE CONNECT THE HOMEBUYERS DIRECTLY WITH THE LISTING AGENT WHO KNOWS THE PROPERTY BEST AND WE ALSO ARE BRINGING IN A NEW APPROACH WHERE WHEN YOU BUY A HOME, YOU ARE NOT BUYING JUST FOUR WALLS AND A YARD. YOU ARE BUYING INTO A COMMUNITY. YOU ARE KIDS BE GOING TO SCHOOL, PLAY IN PARKS. WE ARE INVESTING A LOT INTO CONTENT AROUND COMMUNITIES, NEIGHBORHOODS, SCHOOLS, PUTTING IT TOGETHER AND WE ARE GETTING A VERY POSITIVE REACTION YOU CAN SEE THAT IN OUR TRAFFIC
