Working Capital The Real Estate Podcast

Record Breaking Real Estate Investment with Raymond Wang | EP94

Mar 12, 2022

In This Episode

Raymond Wong is the Vice President of Data Operations for Altus Group’s Data Solutions team and has over 30 years or market research experience. Altus Group is a leading provider of Software, Data Solutions and Independent Advisory Services to the Global commercial Real Estate Industry. In this episode we talked about:

  • Raymond`s First Steps in Commercial Real Estate Industry
  • Overview of 2021 year from Raymond`s Perspective
  • The Retail World of 2021
  • The Future of Office
  • Real Estate Inducement
  • Sublease Market
  • Asset Classes
  • Interest Rates and Inflation Outlook
  • Mentorship, Resources and Lessons Learned

Transcriptions:

Jesse (0s): Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time. Ladies and gentlemen, welcome to working capital the real estate podcast. I’m Jesse for galley. And my special guest today is Raymond Wong. Raymond is the vice president of data operations for the Altice group.

 

For those that aren’t aware, Altis group is a company that provides software, data solutions and independent advisory services to the global commercial real estate industry. We use them quite a bit and have been for as long as I’ve been in the industry. So without further ado, Ray, how’s it going?

 

Raymond (51s): Great. Thanks Jesse. I thank you for having me

 

Jesse (55s): Well, I appreciate you coming on. I think this is definitely a year where people are getting a little bit more into the actual data, looking at deals, I think with a bit more granularity, perhaps in other times as a function of just being, you know, having less product, but a lot of dollars chasing that product. So maybe for the, for the listeners that aren’t familiar with, you, you could give us a little background about how you kind of got started in, in the crazy industry of CRE.

 

Raymond (1m 23s): Yeah. I started in commercial brokerage as a sales trainee, and I just sorta got consumed with in research and sort of got consumed with market trends and analysis. So basically I just sort of ran the research group and then moved over to the consulting side. And then that allowed me to work with a number of various institutions and, and investors and understanding how, how data can be useful to them and then rationalizing some of the decisions and as well as how critical data is especially the right type of data with respect to interpretation and analysis.

 

So basically I spent my last 33 years in research.

 

Jesse (2m 12s): So have you seen, or I guess I should put it this way. What do you think has been one of the biggest changes from the way we look at data and study data in our industry from, you know, when you got started to, to what we do today,

 

Raymond (2m 29s): There’s a lot more value attached to it today, compared to when I started, it was sort of the emphasis, again, going back 33 years, it was more of a gut feel that the data was there and it gave you a sort of indicator, but it was a little bit more sort of wild west. And now we people pay and attach a value to the information, but more is all about interpretation of the trends.

 

Because as, as you know, when you look at certain numbers, it’s not what it seems. And plus that say number, it can be interpreted five or 10 different ways by, by, by different people, right? So data itself is you need to have a firm base and then you need to be able to back up based on your experience or using other indicators to augment where the market’s heading due to, to provide a final conclusion. But at the same time, you also hear that too, to a certain extent that whole gut feel or how you feel about the deal and the numbers is still there, but less so now compared to at least when I started.

 

Jesse (3m 44s): Yeah. I mean, it’s something that really, you can’t do the job of, of real estate, whether it’s in brokerage investment, you know, any aspect of our, of our industry without having that data that we now just see as just something we take for granted where in the past, you know, perhaps it wasn’t as easy to just, you know, go online and figure out a couple of key points for a particular say, product that you’re looking to purchase. We’ve had a crazy 20, 21 where it’s the beginning of a, of 20, 22 here, about two months in.

 

And, you know, hopefully everything from a Canadian context is moving in the right direction. But talk a little bit about 2021, because in a lot of ways it was there, there was a number of records that were broken. Talk about that. And, and, you know, what was that like? What was 2020, like from your perspective,

 

Raymond (4m 36s): It’s that I’ve seen before? Partly you have to go back to 2020 with a pause in the market for three or four months and in the GTA with, with the lockdowns. And there was that sort of, you know, month or so where companies were trying to figure out what does this mean? What’s, what’s going to happen with the economy and everyone’s sort of reviewed their sort of their strategies for, from leasing to acquisitions and 2021 as a result of that pause.

 

And it’s so like a year and a half transactions in one year. So we had record year, we’re going to be up by 40% compared to compared to the last record year back in 2018 and 2019. So if you look at all the momentum in 2021, it’s going to carry forward in 2022, because a lot of the, the elements that caused activity. So there with the availability of capital still historically low interest rates and continued demand, especially, especially what we’ve seen in the past month, the return of foreign buyers in the Canadian marketplace, looking for us to pill stability, and again, good, good solid returns.

 

Jesse (5m 60s): So from the, the aspect of deals done price or evaluations for in certain asset classes, we’ve we saw records, but also activity itself has gone up. What, what have you seen in terms of the different subgroups of commercial real estate? Maybe we could start with, you know, one of the darlings of our industry industrial, you know, how has that activity level change or, or, or continued to increase, I guess,

 

Raymond (6m 29s): Well, it’s, it’s all about e-commerce and it w it was, it was, it was comment the other day that compared to five years ago, the amount of activity with, with the lockdown that everything’s getting delivered, you’re not going to the store or picking up an item, but you’re getting things on an instantaneous basis. You’re getting things that the next day, right. And you you’ve seen the growth in the industrial sector. So back in 2019, we had about 9.7 billion on, on a, on a national basis.

 

And in 2021, we’re at 15.6, sorry. Yeah. $15.6 billion. So you see that, that increase in demand for space, but it’s not just the users, but it’s also from an investment standpoint and the stations and the number of, of sales. So when you look at the overall availability rate, say for lease for the GTA, it’s around 0.9% and it, and industrial property for sales make up about 0.6%.

 

Right. So when you’re a tenant, you’re looking at both sell and lease, but so that’s contributing to just a record, you know, activity on the, on the investment sector, right across the country.

 

Jesse (7m 51s): Yeah. I mean, industrial it’s, it’s pretty amazing to see the amount of activity from the brokerage perspective, kind of like the boots on the ground, just seeing just the volume and, and the prices that are being paid. So if we move from, from industrial over to retail, what is the, what does that world look like in 2021?

 

Raymond (8m 11s): You know, it’s, it’s as two things, sorry, it looks like the investment side has not skipped a beat, and we’re a slightly above retail compared to 2019. And again, it’s, it’s retail and office, that sort of the number of concerns regards to our sector and office went from 8.9 billion down to about, about 5 billion this year.

 

But on the retail side, there’s the investor standpoint. So especially the number of downloads with retail there’s that there’s a redevelopment opportunity to bring it to higher invest use because of the location. So I think we’ve seen continued demand in that area, especially with anything with food anchored gro grocery on the, on the Plaza or retail centers have been getting a lot of play, especially with the pandemic. And, and that’s one of the, the, the sort of the Constance from a consumer standpoint, retail, especially though the regional malls and the major centers you still have that need for interaction similar to the office that you want as a place to, to sort of meet people.

 

And, you know, the, with the, with, with, you know, the lockdown re reducing order restrictions, reducing is a chance to, to meet at restaurants and to actually see the product. So I think as you can’t really see the product on the screen, you need to experience a, you need to try to comparables, you need to speak to an expert in asking about a particular product, especially if the clothes you need to try it on. And instead of buying 10 pairs of shoes and then online and returning eight pairs, you can actually get what you need with, with allocation.

 

And from retailer standpoint, if you’re online, you’re buying that one specific item, but when you’re in a store, like, I, I always use the example from Costco when we’re going to Costco, we’re only buying milk and we’re buying eggs, but on average, we come out spending about $300 because there’s this there’s item and there’s surprises. So when you go into a store, you’re actually buying more than you’re anticipating, and it’s very strategic amongst the retailers on how they lay out certain products, right?

 

So, so there’s a need from the, the, the retailer to have the sort of omni-channel options for the clients, as well as I think there’s that need for interaction and social activity from consumers. So I think for our retail standpoint, we’re still gonna see sort of that evolution and change and retail I think is still very much needed. And you can tell based on the investment activity, as well as a slow recovery and in the, in the openings of some of the major malls.

 

Jesse (11m 12s): Yeah. That makes sense. And I think another similar to industrial, we’ve seen a lot of activity on the multi-residential side. One thing I thought was, was kind of telling of the data was the, the 20, 19 to 2021. We saw a balloon in, in actual dollars for industrial. I saw a, I was kind of surprised the, that the multi res wasn’t as high or wasn’t, excuse me, the percentage increase wasn’t as substantial. I thought it would have been more, but perhaps it would maybe be more telling if we were comparing 20 17, 20 18 to 2021 on the multi res side.

 

Raymond (11m 52s): Well, the thing malty Raz has always been a sought after product, right? And you always had that, you know, especially with Toronto Vancouver, that sub two sub 3% cap rate and with industrial, for the, for the tenant. Now we’re starting to see some, some cap rates for industrial come in at less than three or two and a half percent, especially with the large logistics warehouse distribution companies.

 

I see that as a shift, whereas with apartments, eh, and cervix industrial as well, the challenge is to be able to find that product. Now we’re starting to see, you know, the, the increase in, cause there’s, there’s a real shortage of housing across Canada. And now we’re seeing an increase in purpose-built rentals, right? It’s especially with the institutions and investment side. And so anything with excess land or price, a redevelopment on the side, we’ll trade and trade at a premium.

 

The other thing that you’re seeing, especially with on the residential side, it’s, it’s not what it seems worth when you look at certain rates. So there’s been a couple of projects in downtown Toronto, but older office building locations that, that sold for a very low cap rate up under 4%, but it wasn’t really reflective of the current use. It was reflect reflective of the future use. And that’s what the purchaser secured the property for a future residential down the road.

 

So yet when you look at the cap rates, I think this goes back to the interpretation of numbers. You have to be careful of what is the intention of, of that property. What does does that number were flat? So is that secondary research that you really have to apply to really understand the numbers and you just can’t accept the numbers of verbatim.

 

Jesse (13m 53s): Yeah. It’s one of those things where cap rate can tell you so much, I mean, any, any real estate metric, whether it’s IRR internal rate of return cap rate, I mean, it falls flat on its face. Once you have a half vacant building, which, you know, w and further analysis might be a great opportunity, but a terrible cap rate if we’re using in place income. So the, the, the last one here is office. And like you said before, I think retail and office took the biggest hit. One thing I think was different with office leaving out the, the actual leasing and the investment sales, then it shrunk quite substantially compared to two, three years before what has been kind of the, the conventional wisdom on from the research groups as to office and the future of office.

 

Raymond (14m 43s): And a lot of discussion has been in the urban or the downtown market. I’m a big believer of the return to the office, especially the downtown and the world bank Plaza, office transactions is, is reflective of that, that continued confidence in the marketplace. And with close proximity to retail, close to work, and as well as if you, if you’re downtown and if you’re living, especially living downtown, you don’t need a car, right?

 

So there’s that aspect of it. So we’re going through sort of a, with a lockdown, no lockdown, and you’re starting to see a little bit increased activity, especially for the car front. People are still a little bit concerned about taking public transit. So they’re driving in. So the traffic congestion that I experienced for the pandemic I’m experienced in the same amount, especially if I leave at five or five 30 from the office by eventually I think as more people come back in, starts with the senior managers, and then other people start going back in, is that a form of fear of missing out component of it?

 

I think we’re going to return to a certain level of demand and Missy, but I also believe that the hybrid work from home component was still being in play because what we found out in the last couple of years, some departments and some individuals actually, they work better at home rather than the office. So the hybrid is not going to go away. There’s actually going to be more flexibility of the space and more collaboration and more chances for interaction within. And I give you a reason to, for people to actually come in and not just to work, but to have that interaction.

 

So I I’m, I’m a strong believer from that standpoint, from that demands perspective. And we really haven’t seen or seen sort of some of the price points on the offside declined slightly, but not to any massive gray, because the other thing is that there hasn’t been a lot of transactions in that area. Cause it’s a wait and see, and whether or not, you know, the occupancy levels will increase the spaces leased out, but getting people back into the office. So I think over the next, you know, nine to 18 months, we’re going to see more of whether or not it’s going to return to a semblance of normalcy and whether or not the, the, the occupancy levels will increase over time.

 

Especially if we sort of get past this pandemic or at least prior to work with that.

 

Jesse (17m 14s): Yeah. I think the, the office one is, is interesting in the sense that the owners typically, especially the institutional owners, I have deeper pockets, I think can wait it out a little bit better than under, than other segments, but it is like you said, it’s the, for me, it’s not necessarily the evaluations, it’s the activity that has just kind of grinded to a halt for a period of time. How do you look at office when it comes to, if we, if we take the premise that there’s going to be a longterm trend or a change from these 10, 15 year leases, just assuming they’re five, 10 and 15 year to more flexible leases from the underwriting standpoint, you know, how do you, how does that impact values or how you look at valuations?

 

Raymond (17m 59s): Oh, that’s a really good question. And actually we were looking at that before the pandemic, because we’re already seeing a lot more flexibility and, and leases because companies would need it to be able to pivot quickly, especially with the tech companies and the average drop down to about three to 5%. And that was from, from, from a value standpoint, you no longer have that longer term income. And how do you look at the, the, the, the, those type of values. So even with those concerns, we haven’t really seen a big shift in, in, in, in, in values.

 

And that’s because of what you just said with Deepak is by the institutions that we haven’t seen, that, that, that movement and back then, or pre pandemic, it was, it was little bit more difficult to say because you’re also dealing with what three to 5% office vacancy rates. But now when you’re dealing with double digits, we interesting whether or not those values are impacted, but I’m not sure if it’s just based on, on the vacant space or the occupancy of the building and impact on the IRR or the lease terms.

 

So it’s probably a combination of both and again, as a sort of a wait and see, but we haven’t seen yet and major shift in values because of the, because of the, the more sort of flux terms.

 

Jesse (19m 23s): Do you think that these, you know, major markets that have had historically very low vacancies, whether it’s, you know, you’re in San Francisco, New York, Vancouver, Toronto, do you think that these, these areas are going to actually start get into a balanced space where we’re seeing inducements, like some of the smaller cities where, you know, stuff that we would hear, oh, they induced the deal at a hundred dollars per square foot, or for those that aren’t aware of an inducement, a tenant allowance, basically giving the tenant cash in hand. Are we going to start seeing that as a, as a norm in, in these type of markets that are, that I mentioned,

 

Raymond (19m 59s): I, you know, what the markets are, you mentioned with, especially with San Francisco Vancouver, those are, you know, global cities and you look at, and there’s been a lot discussion about the tech workers and the tech companies that have located in these markets. So it all depends on how long we see high office vacancy rates, four and 4, 4, 4. Is it a specific sector, is a class B or C the Mo the bulk of vacancy, because right now what we’re seeing is that there’s a lot demand for the newer products, especially with the HVAC and updated filter systems and, and, and the floods wall space to bring in the new type of hot desking and so on and so forth.

 

So depending on where the vacancy rates are, and with a place like San Francisco is starting to tighten up again a little bit, and especially with, you know, Vancouver, I think we’re starting to see the first element of a quicker recovery, especially with expansion, with some of the tech companies out there. And I think we’re going to probably see something sort of summer in while we are we’re, we’re seeing more lease activity in Toronto and whether or not it adaptive style with the challenge right now is that, you know, 8 million square feet that is currently under construction and what is complete, and then how that’s going to impact the marketplace.

 

So I think we will see sort of tenant inducements by again, depending on how long the, the vacancy rates stay high before landlord sort of want to sort of lease that space up and add more tenant decent. So we’re seeing a little bit of it with a blend of extends with some of tenants and some of the space, but we sort of w we sort of have to wait and see and see what, what, what the trend will be.

 

Jesse (21m 59s): Yeah, we are seeing a lot more early extensions or renewals, like you said, blend and extend, you know, do that weighted average of, of rates one area. It’s, it’s good to be able to talk to you here, cause we’ve heard so much different data from the sublease market. You know, for those that don’t know, you know, tenants that are current tenants with a, with a landlord, a head landlord of a building, you know, over this pandemic, we’ve seen an increase, an increase in them, subleasing their space like you would do in college or university.

 

The question I have is how do you get that data when we’re talking about availability rates or sublease rates, because oftentimes this, this pro product can be occupied. It might not be occupied. It might be an under contract or not contract, not in contract. So do you look at the sublease market as a bit of a different animal when you’re, when you’re looking at the, the data and what the data’s telling you?

 

Raymond (22m 56s): I absolutely. When, when the pandemic hat and we were, we, we, we knew what we would need to track that sub landmark. So sublime market in a balanced market is probably between 12 and 18% in that range, depending on where you are. But we knew that when w when the lockers were happening and their announcements would give back a space or not going back to the office, a satellite was going to increase.

 

So whatever increases north 35, 40%, that’s what it starts competing with the drug space, right? So you can have space that has already been built out competing was in some cases, raw space, right? So that sort of pushes some of the, the, the rates. And fortunately, over the last eight, 18 months, over the last six months, we’ve seen a decline in the percentage of available space, that sublime, especially where it was hit, the hardest with Toronto Vancouver downtown.

 

So the nice thing is that it’s in the low twenties, but a lot of that was due to some of that sublet space being leased out. Some of it, as you mentioned earlier, Jessie, the blended extends. But the other thing is that some of the terms were, were expiring. So something that we need to watch, especially with a market that’s going through flux, or there’s a sort of economic slowdown that we’re really watched that because then it hits a certain point.

 

Then we’ll, we’ll probably start seeing more tears hit the marketplace, but definitely over the last six or nine months has really declined in those two sort of problem markers as we saw early in the pandemic.

 

Jesse (24m 46s): So if we take a Toronto as an example, correct me on the numbers here, because what I have heard over over the pandemic is that we were pre pandemic. I don’t know if it was six or 700 million square feet of sublease space to peak peaking at the high point. What was it in the, in the three and a half million mark, three, three low threes? What did that look like as a, as a raw figure before, and maybe in the peak, which I assume was sometime at the mid to end of last year,

 

Raymond (25m 14s): You know, I it’s, I think it’s down by while at least 20 or 30%, but it is down a stiffly front of the peak. Th th th the other thing that we’re not factoring in, I think is less so in this market compared to your market, like Calgary is the shadow vacancies that it’s not being marketed, but not formally being marketed by sector space, beat held by, by the tenants. I don’t think that’s the case in Toronto and Vancouver where you have that shadow space.

 

I think what the sublet space we’re showing is true cyberspace. And I don’t see, we see that we have a lot of shadow space and I, this is a little bit different sort of, sort of right when the pandemic started. Cause I think there’s a lot more shouts places. So the availability that was showing was probably a lot lower than what the real market was showing. But now I think is starting to tighten up a little bit on the Saba side is a little bit more transparent.

 

Jesse (26m 14s): Got it. So that three and a half or 3 million that probably that’s, I guess, out of what out of roughly 10 million available, something like that. Yeah. So I want to pivot a little to an asset class. It’s, it’s just being, I’ve been hearing it more and more often from, from clients and just investment individuals in our real, in real estate space in general. And that’s student housing. I know that you, you guys track all the major food groups in the commercial real estate side. Do you guys track student housing, student property properties either in Canada or globally?

 

Raymond (26m 49s): Yeah. In Canada, we, we track on the transaction side and that’s sort of a niche investment sector such as young public storage, your data centers and your life sciences. Right. And, and we’re actually going to start track and with our multi-family part of this coming up with purpose-built rental. So it’s, it’s an area that’s always effect is a little bit higher cap rate just because of the risk and ball with some of those type of assets.

 

But especially with the activity you’ve seen in, in, in the university has, is, is it’s, it’s, it’s a sought after product, but it doesn’t really fetch the same type of cap rates of your typical apartment or multiple multi-family residential.

 

Jesse (27m 41s): Yeah. Well, I mean, that makes sense. I have seen more and more people kind of look towards that. I think maybe the thinking was if you can withstand a global pandemic and still be okay, then this asset class looks fairly recession resistant. I want to, we, we have four questions. We ask every guest that comes on the show at the end here, but before we get there, I just want to kind of get your take on the outlook for 2022 with the backdrop of interest rates, a lot of talk about inflation.

 

And it seems like we’re going to have, like you said, a spill over effect from 2021 into 2022. So, you know, what, what do you see going forward? What, what type of things should we be on the lookout for?

 

Raymond (28m 25s): Well, you know, the, the interest rates will be interesting, whether that impacts consumer spending and it has slowed down a little bit and whether or not that impacts the, the GDP, but I don’t think that the increase in interest rates are going to impact the appetite for commercial investments. So I still think that’s going to remain strong for this year, just because the availability of capital. And we look at, you know, the 10 year bond versus the chiropractor.

 

There’s still a huge gap there, even though with this increase in interest rates. I think on the office side, we have to wait and see the next couple of months with, with, in, in Ontario with the reduction of, of re re restrictions. But I also think that we’re, we’re probably going to see a increase in lease activity compared to, to a year ago. So I think that’s, that’s a positive because just the natural flow of some of the lease expirees and, you know, is a, is a it’s of course industrial is going to remain strong, not, not a lot of demand on a supply and the same thing with the other asset classes, with respect to apartment, as well as land.

 

The cool thing about land is, you know, that’s a good bellwether with, you know, especially what’s happened in the residential side and you look at places like calidad and you look at north of Barrie, the 4 0 1, the four, one quarter Southwestern Ontario, and you’ve seen a lot more sort of acquisitions or, or activity there and that sort of that next play or the next growth based on that, you know, the, the, that, that urban growth of, or expansion outside of the GTA and more into the sec secondary and tertiary Americas, especially based on housing affordability.

 

So I think 20, 22, we’re going to see, I don’t see any major hiccups by again, there’s going to be some surprises that noises in the, in the market and whether that, that slows it down, it’ll be interesting to watch, but I don’t really see anything that will sort of take down the market at this point.

 

Jesse (30m 39s): Okay. You heard it here first. All right. We’ve got four questions. We ask every guest. I promise they’re a, they’re easy Raymond. So if you’re ready, all a LABA, Matt. Yeah.

 

Raymond (30m 47s): You didn’t give me these questions.

 

Jesse (30m 49s): Oh, I know it wasn’t

 

Raymond (30m 50s): In the notes.

 

Jesse (30m 50s): Absolutely. This is a rapid fire. So what’s something that, you know, now in your career, it can be in business or real estate that you really wish you knew when you first started out.

 

Raymond (31m 5s): No, it’s, it’s all, as you know, with, with commercial real estate, it’s a small group of, of people proportionally and it’s, it’s about relationships. It’s, it’s about networking. Right? And I, I, and if, especially with people I started out with about you over 30 years ago, and we’re still friends with, and we’re solid in the industry together. And I was also found is, is it’s people like to cooperate, but one of the main things I want to follow, especially this is why I tell people when they started out be famous or one thing, be very good at it and be known for that particular area, for people to seek your advice or to seek your help in solving their problem.

 

Right? So one the whole relationship, but two as well as be known for something and be, and be your best at it.

 

Jesse (32m 2s): So that’s a great segue to our second question. Wanted to just get your thoughts on mentorship for individuals coming into our industry. And perhaps we can even specify a little more because of your background for individuals that may be, I want to go into whether it’s B B on the economist side, the research side or data, you know, what would be advice for, for those types of individuals?

 

Raymond (32m 26s): Yeah, I, okay. I have a bias here because I, I love research and especially with both, you know, the broken firms and our firms that if you want to get into the sector that brokerage and, and sort of the service companies are, it’s a great place to learn the business because you’re starting out at junior level, you’re exposed to very smart people and very good experience. And in the industry, and you, you learn through research through reading reports and you sort of develop your expertise.

 

And plus what I said earlier, that all of us, we really, we really want to help and watch that second generation grow, that that’s basically going to replace us, right? So we want to see them succeed. So very open to discussions or opinions, and we tend to refer people over as well to, you know, you should really speak to this person regardless of the industrial sector, the best in that, in that, in that area. But I find that people are willing to, to talk which, which, which really helps the, the growth of the sector.

 

Jesse (33m 35s): Yeah. I do think that’s one thing, at least in, in the tunnel vision of our industry, that I find people are very open to. They like to see younger people, especially if those younger people are motivated, what is a one or two books that you find yourself recommending all the time?

 

Raymond (33m 53s): Yeah. This goes back as that, that good to great series, try to stay within your, the certain element of, of stretching, but make sure you understand what, what, what your core value is or what, what is that company? What does it represent? Right. And again, as, as being more to focus on your strengths, the other book is Freakonomics and the way they look at the economy and the way they look at different data elements that may not seem relative to, or related to that trend, you’re looking at that you need to look at other things and, you know, be a little bit more flexible and open with different ideas and different feedback, different perspectives from different people.

 

But what really got me was the data element and how certain things that you wouldn’t think are related are related and how that sort of impacts that future growth.

 

Jesse (35m 1s): Yeah. That’s, I mean, it’s just a book where if you, can you put forth applied economics in a, in a fun and an easy to understand or memorable way. Yeah, absolutely. All right. Last question. First car, make and model

 

Raymond (35m 15s): Onto the court

 

Jesse (35m 17s): Right on. I thought it was going to get something exotic. Raven. Usually when I have the seasoned vets in here, I get a, I get some, you know, 1970s or 1980s Unique.

 

Raymond (35m 28s): I am a researcher. It doesn’t go that one.

 

Jesse (35m 32s): Yeah. Pretty simple. All right. My guest today has been Raymond Wong, Raymond, thanks for being part of working capital.

 

Raymond (35m 39s): Boom fun. Thanks, Jesse.

 

Jesse (35m 49s): Thank you so much for listening to working capital the real estate podcast. I’m your host, Jesse for galley. If you liked the episode, head on to iTunes and leave us a five star review and share on social media, it really helps us out. If you have any questions, feel free to reach out to me on Instagram, Jesse for galley, F R a G a L E, have a good one. Take care.

Transcript

ions:

Jesse (0s): Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you're looking at your first investment or raising your first fund, join me and let's build that portfolio one square foot at a time. Ladies and gentlemen, welcome to working capital the real estate podcast. I'm Jesse for galley. And my special guest today is Raymond Wong. Raymond is the vice president of data operations for the Altice group.

 

For those that aren't aware, Altis group is a company that provides software, data solutions and independent advisory services to the global commercial real estate industry. We use them quite a bit and have been for as long as I've been in the industry. So without further ado, Ray, how's it going?

 

Raymond (51s): Great. Thanks Jesse. I thank you for having me

 

Jesse (55s): Well, I appreciate you coming on. I think this is definitely a year where people are getting a little bit more into the actual data, looking at deals, I think with a bit more granularity, perhaps in other times as a function of just being, you know, having less product, but a lot of dollars chasing that product. So maybe for the, for the listeners that aren't familiar with, you, you could give us a little background about how you kind of got started in, in the crazy industry of CRE.

 

Raymond (1m 23s): Yeah. I started in commercial brokerage as a sales trainee, and I just sorta got consumed with in research and sort of got consumed with market trends and analysis. So basically I just sort of ran the research group and then moved over to the consulting side. And then that allowed me to work with a number of various institutions and, and investors and understanding how, how data can be useful to them and then rationalizing some of the decisions and as well as how critical data is especially the right type of data with respect to interpretation and analysis.

 

So basically I spent my last 33 years in research.

 

Jesse (2m 12s): So have you seen, or I guess I should put it this way. What do you think has been one of the biggest changes from the way we look at data and study data in our industry from, you know, when you got started to, to what we do today,

 

Raymond (2m 29s): There's a lot more value attached to it today, compared to when I started, it was sort of the emphasis, again, going back 33 years, it was more of a gut feel that the data was there and it gave you a sort of indicator, but it was a little bit more sort of wild west. And now we people pay and attach a value to the information, but more is all about interpretation of the trends.

 

Because as, as you know, when you look at certain numbers, it's not what it seems. And plus that say number, it can be interpreted five or 10 different ways by, by, by different people, right? So data itself is you need to have a firm base and then you need to be able to back up based on your experience or using other indicators to augment where the market's heading due to, to provide a final conclusion. But at the same time, you also hear that too, to a certain extent that whole gut feel or how you feel about the deal and the numbers is still there, but less so now compared to at least when I started.

 

Jesse (3m 44s): Yeah. I mean, it's something that really, you can't do the job of, of real estate, whether it's in brokerage investment, you know, any aspect of our, of our industry without having that data that we now just see as just something we take for granted where in the past, you know, perhaps it wasn't as easy to just, you know, go online and figure out a couple of key points for a particular say, product that you're looking to purchase. We've had a crazy 20, 21 where it's the beginning of a, of 20, 22 here, about two months in.

 

And, you know, hopefully everything from a Canadian context is moving in the right direction. But talk a little bit about 2021, because in a lot of ways it was there, there was a number of records that were broken. Talk about that. And, and, you know, what was that like? What was 2020, like from your perspective,

 

Raymond (4m 36s): It's that I've seen before? Partly you have to go back to 2020 with a pause in the market for three or four months and in the GTA with, with the lockdowns. And there was that sort of, you know, month or so where companies were trying to figure out what does this mean? What's, what's going to happen with the economy and everyone's sort of reviewed their sort of their strategies for, from leasing to acquisitions and 2021 as a result of that pause.

 

And it's so like a year and a half transactions in one year. So we had record year, we're going to be up by 40% compared to compared to the last record year back in 2018 and 2019. So if you look at all the momentum in 2021, it's going to carry forward in 2022, because a lot of the, the elements that caused activity. So there with the availability of capital still historically low interest rates and continued demand, especially, especially what we've seen in the past month, the return of foreign buyers in the Canadian marketplace, looking for us to pill stability, and again, good, good solid returns.

 

Jesse (5m 60s): So from the, the aspect of deals done price or evaluations for in certain asset classes, we've we saw records, but also activity itself has gone up. What, what have you seen in terms of the different subgroups of commercial real estate? Maybe we could start with, you know, one of the darlings of our industry industrial, you know, how has that activity level change or, or, or continued to increase, I guess,

 

Raymond (6m 29s): Well, it's, it's all about e-commerce and it w it was, it was, it was comment the other day that compared to five years ago, the amount of activity with, with the lockdown that everything's getting delivered, you're not going to the store or picking up an item, but you're getting things on an instantaneous basis. You're getting things that the next day, right. And you you've seen the growth in the industrial sector. So back in 2019, we had about 9.7 billion on, on a, on a national basis.

 

And in 2021, we're at 15.6, sorry. Yeah. $15.6 billion. So you see that, that increase in demand for space, but it's not just the users, but it's also from an investment standpoint and the stations and the number of, of sales. So when you look at the overall availability rate, say for lease for the GTA, it's around 0.9% and it, and industrial property for sales make up about 0.6%.

 

Right. So when you're a tenant, you're looking at both sell and lease, but so that's contributing to just a record, you know, activity on the, on the investment sector, right across the country.

 

Jesse (7m 51s): Yeah. I mean, industrial it's, it's pretty amazing to see the amount of activity from the brokerage perspective, kind of like the boots on the ground, just seeing just the volume and, and the prices that are being paid. So if we move from, from industrial over to retail, what is the, what does that world look like in 2021?

 

Raymond (8m 11s): You know, it's, it's as two things, sorry, it looks like the investment side has not skipped a beat, and we're a slightly above retail compared to 2019. And again, it's, it's retail and office, that sort of the number of concerns regards to our sector and office went from 8.9 billion down to about, about 5 billion this year.

 

But on the retail side, there's the investor standpoint. So especially the number of downloads with retail there's that there's a redevelopment opportunity to bring it to higher invest use because of the location. So I think we've seen continued demand in that area, especially with anything with food anchored gro grocery on the, on the Plaza or retail centers have been getting a lot of play, especially with the pandemic. And, and that's one of the, the, the sort of the Constance from a consumer standpoint, retail, especially though the regional malls and the major centers you still have that need for interaction similar to the office that you want as a place to, to sort of meet people.

 

And, you know, the, with the, with, with, you know, the lockdown re reducing order restrictions, reducing is a chance to, to meet at restaurants and to actually see the product. So I think as you can't really see the product on the screen, you need to experience a, you need to try to comparables, you need to speak to an expert in asking about a particular product, especially if the clothes you need to try it on. And instead of buying 10 pairs of shoes and then online and returning eight pairs, you can actually get what you need with, with allocation.

 

And from retailer standpoint, if you're online, you're buying that one specific item, but when you're in a store, like, I, I always use the example from Costco when we're going to Costco, we're only buying milk and we're buying eggs, but on average, we come out spending about $300 because there's this there's item and there's surprises. So when you go into a store, you're actually buying more than you're anticipating, and it's very strategic amongst the retailers on how they lay out certain products, right?

 

So, so there's a need from the, the, the retailer to have the sort of omni-channel options for the clients, as well as I think there's that need for interaction and social activity from consumers. So I think for our retail standpoint, we're still gonna see sort of that evolution and change and retail I think is still very much needed. And you can tell based on the investment activity, as well as a slow recovery and in the, in the openings of some of the major malls.

 

Jesse (11m 12s): Yeah. That makes sense. And I think another similar to industrial, we've seen a lot of activity on the multi-residential side. One thing I thought was, was kind of telling of the data was the, the 20, 19 to 2021. We saw a balloon in, in actual dollars for industrial. I saw a, I was kind of surprised the, that the multi res wasn't as high or wasn't, excuse me, the percentage increase wasn't as substantial. I thought it would have been more, but perhaps it would maybe be more telling if we were comparing 20 17, 20 18 to 2021 on the multi res side.

 

Raymond (11m 52s): Well, the thing malty Raz has always been a sought after product, right? And you always had that, you know, especially with Toronto Vancouver, that sub two sub 3% cap rate and with industrial, for the, for the tenant. Now we're starting to see some, some cap rates for industrial come in at less than three or two and a half percent, especially with the large logistics warehouse distribution companies.

 

I see that as a shift, whereas with apartments, eh, and cervix industrial as well, the challenge is to be able to find that product. Now we're starting to see, you know, the, the increase in, cause there's, there's a real shortage of housing across Canada. And now we're seeing an increase in purpose-built rentals, right? It's especially with the institutions and investment side. And so anything with excess land or price, a redevelopment on the side, we'll trade and trade at a premium.

 

The other thing that you're seeing, especially with on the residential side, it's, it's not what it seems worth when you look at certain rates. So there's been a couple of projects in downtown Toronto, but older office building locations that, that sold for a very low cap rate up under 4%, but it wasn't really reflective of the current use. It was reflect reflective of the future use. And that's what the purchaser secured the property for a future residential down the road.

 

So yet when you look at the cap rates, I think this goes back to the interpretation of numbers. You have to be careful of what is the intention of, of that property. What does does that number were flat? So is that secondary research that you really have to apply to really understand the numbers and you just can't accept the numbers of verbatim.

 

Jesse (13m 53s): Yeah. It's one of those things where cap rate can tell you so much, I mean, any, any real estate metric, whether it's IRR internal rate of return cap rate, I mean, it falls flat on its face. Once you have a half vacant building, which, you know, w and further analysis might be a great opportunity, but a terrible cap rate if we're using in place income. So the, the, the last one here is office. And like you said before, I think retail and office took the biggest hit. One thing I think was different with office leaving out the, the actual leasing and the investment sales, then it shrunk quite substantially compared to two, three years before what has been kind of the, the conventional wisdom on from the research groups as to office and the future of office.

 

Raymond (14m 43s): And a lot of discussion has been in the urban or the downtown market. I'm a big believer of the return to the office, especially the downtown and the world bank Plaza, office transactions is, is reflective of that, that continued confidence in the marketplace. And with close proximity to retail, close to work, and as well as if you, if you're downtown and if you're living, especially living downtown, you don't need a car, right?

 

So there's that aspect of it. So we're going through sort of a, with a lockdown, no lockdown, and you're starting to see a little bit increased activity, especially for the car front. People are still a little bit concerned about taking public transit. So they're driving in. So the traffic congestion that I experienced for the pandemic I'm experienced in the same amount, especially if I leave at five or five 30 from the office by eventually I think as more people come back in, starts with the senior managers, and then other people start going back in, is that a form of fear of missing out component of it?

 

I think we're going to return to a certain level of demand and Missy, but I also believe that the hybrid work from home component was still being in play because what we found out in the last couple of years, some departments and some individuals actually, they work better at home rather than the office. So the hybrid is not going to go away. There's actually going to be more flexibility of the space and more collaboration and more chances for interaction within. And I give you a reason to, for people to actually come in and not just to work, but to have that interaction.

 

So I I'm, I'm a strong believer from that standpoint, from that demands perspective. And we really haven't seen or seen sort of some of the price points on the offside declined slightly, but not to any massive gray, because the other thing is that there hasn't been a lot of transactions in that area. Cause it's a wait and see, and whether or not, you know, the occupancy levels will increase the spaces leased out, but getting people back into the office. So I think over the next, you know, nine to 18 months, we're going to see more of whether or not it's going to return to a semblance of normalcy and whether or not the, the, the occupancy levels will increase over time.

 

Especially if we sort of get past this pandemic or at least prior to work with that.

 

Jesse (17m 14s): Yeah. I think the, the office one is, is interesting in the sense that the owners typically, especially the institutional owners, I have deeper pockets, I think can wait it out a little bit better than under, than other segments, but it is like you said, it's the, for me, it's not necessarily the evaluations, it's the activity that has just kind of grinded to a halt for a period of time. How do you look at office when it comes to, if we, if we take the premise that there's going to be a longterm trend or a change from these 10, 15 year leases, just assuming they're five, 10 and 15 year to more flexible leases from the underwriting standpoint, you know, how do you, how does that impact values or how you look at valuations?

 

Raymond (17m 59s): Oh, that's a really good question. And actually we were looking at that before the pandemic, because we're already seeing a lot more flexibility and, and leases because companies would need it to be able to pivot quickly, especially with the tech companies and the average drop down to about three to 5%. And that was from, from, from a value standpoint, you no longer have that longer term income. And how do you look at the, the, the, the, those type of values. So even with those concerns, we haven't really seen a big shift in, in, in, in, in values.

 

And that's because of what you just said with Deepak is by the institutions that we haven't seen, that, that, that movement and back then, or pre pandemic, it was, it was little bit more difficult to say because you're also dealing with what three to 5% office vacancy rates. But now when you're dealing with double digits, we interesting whether or not those values are impacted, but I'm not sure if it's just based on, on the vacant space or the occupancy of the building and impact on the IRR or the lease terms.

 

So it's probably a combination of both and again, as a sort of a wait and see, but we haven't seen yet and major shift in values because of the, because of the, the more sort of flux terms.

 

Jesse (19m 23s): Do you think that these, you know, major markets that have had historically very low vacancies, whether it's, you know, you're in San Francisco, New York, Vancouver, Toronto, do you think that these, these areas are going to actually start get into a balanced space where we're seeing inducements, like some of the smaller cities where, you know, stuff that we would hear, oh, they induced the deal at a hundred dollars per square foot, or for those that aren't aware of an inducement, a tenant allowance, basically giving the tenant cash in hand. Are we going to start seeing that as a, as a norm in, in these type of markets that are, that I mentioned,

 

Raymond (19m 59s): I, you know, what the markets are, you mentioned with, especially with San Francisco Vancouver, those are, you know, global cities and you look at, and there's been a lot discussion about the tech workers and the tech companies that have located in these markets. So it all depends on how long we see high office vacancy rates, four and 4, 4, 4. Is it a specific sector, is a class B or C the Mo the bulk of vacancy, because right now what we're seeing is that there's a lot demand for the newer products, especially with the HVAC and updated filter systems and, and, and the floods wall space to bring in the new type of hot desking and so on and so forth.

 

So depending on where the vacancy rates are, and with a place like San Francisco is starting to tighten up again a little bit, and especially with, you know, Vancouver, I think we're starting to see the first element of a quicker recovery, especially with expansion, with some of the tech companies out there. And I think we're going to probably see something sort of summer in while we are we're, we're seeing more lease activity in Toronto and whether or not it adaptive style with the challenge right now is that, you know, 8 million square feet that is currently under construction and what is complete, and then how that's going to impact the marketplace.

 

So I think we will see sort of tenant inducements by again, depending on how long the, the vacancy rates stay high before landlord sort of want to sort of lease that space up and add more tenant decent. So we're seeing a little bit of it with a blend of extends with some of tenants and some of the space, but we sort of w we sort of have to wait and see and see what, what, what the trend will be.

 

Jesse (21m 59s): Yeah, we are seeing a lot more early extensions or renewals, like you said, blend and extend, you know, do that weighted average of, of rates one area. It's, it's good to be able to talk to you here, cause we've heard so much different data from the sublease market. You know, for those that don't know, you know, tenants that are current tenants with a, with a landlord, a head landlord of a building, you know, over this pandemic, we've seen an increase, an increase in them, subleasing their space like you would do in college or university.

 

The question I have is how do you get that data when we're talking about availability rates or sublease rates, because oftentimes this, this pro product can be occupied. It might not be occupied. It might be an under contract or not contract, not in contract. So do you look at the sublease market as a bit of a different animal when you're, when you're looking at the, the data and what the data's telling you?

 

Raymond (22m 56s): I absolutely. When, when the pandemic hat and we were, we, we, we knew what we would need to track that sub landmark. So sublime market in a balanced market is probably between 12 and 18% in that range, depending on where you are. But we knew that when w when the lockers were happening and their announcements would give back a space or not going back to the office, a satellite was going to increase.

 

So whatever increases north 35, 40%, that's what it starts competing with the drug space, right? So you can have space that has already been built out competing was in some cases, raw space, right? So that sort of pushes some of the, the, the rates. And fortunately, over the last eight, 18 months, over the last six months, we've seen a decline in the percentage of available space, that sublime, especially where it was hit, the hardest with Toronto Vancouver downtown.

 

So the nice thing is that it's in the low twenties, but a lot of that was due to some of that sublet space being leased out. Some of it, as you mentioned earlier, Jessie, the blended extends. But the other thing is that some of the terms were, were expiring. So something that we need to watch, especially with a market that's going through flux, or there's a sort of economic slowdown that we're really watched that because then it hits a certain point.

 

Then we'll, we'll probably start seeing more tears hit the marketplace, but definitely over the last six or nine months has really declined in those two sort of problem markers as we saw early in the pandemic.

 

Jesse (24m 46s): So if we take a Toronto as an example, correct me on the numbers here, because what I have heard over over the pandemic is that we were pre pandemic. I don't know if it was six or 700 million square feet of sublease space to peak peaking at the high point. What was it in the, in the three and a half million mark, three, three low threes? What did that look like as a, as a raw figure before, and maybe in the peak, which I assume was sometime at the mid to end of last year,

 

Raymond (25m 14s): You know, I it's, I think it's down by while at least 20 or 30%, but it is down a stiffly front of the peak. Th th th the other thing that we're not factoring in, I think is less so in this market compared to your market, like Calgary is the shadow vacancies that it's not being marketed, but not formally being marketed by sector space, beat held by, by the tenants. I don't think that's the case in Toronto and Vancouver where you have that shadow space.

 

I think what the sublet space we're showing is true cyberspace. And I don't see, we see that we have a lot of shadow space and I, this is a little bit different sort of, sort of right when the pandemic started. Cause I think there's a lot more shouts places. So the availability that was showing was probably a lot lower than what the real market was showing. But now I think is starting to tighten up a little bit on the Saba side is a little bit more transparent.

 

Jesse (26m 14s): Got it. So that three and a half or 3 million that probably that's, I guess, out of what out of roughly 10 million available, something like that. Yeah. So I want to pivot a little to an asset class. It's, it's just being, I've been hearing it more and more often from, from clients and just investment individuals in our real, in real estate space in general. And that's student housing. I know that you, you guys track all the major food groups in the commercial real estate side. Do you guys track student housing, student property properties either in Canada or globally?

 

Raymond (26m 49s): Yeah. In Canada, we, we track on the transaction side and that's sort of a niche investment sector such as young public storage, your data centers and your life sciences. Right. And, and we're actually going to start track and with our multi-family part of this coming up with purpose-built rental. So it's, it's an area that's always effect is a little bit higher cap rate just because of the risk and ball with some of those type of assets.

 

But especially with the activity you've seen in, in, in the university has, is, is it's, it's, it's a sought after product, but it doesn't really fetch the same type of cap rates of your typical apartment or multiple multi-family residential.

 

Jesse (27m 41s): Yeah. Well, I mean, that makes sense. I have seen more and more people kind of look towards that. I think maybe the thinking was if you can withstand a global pandemic and still be okay, then this asset class looks fairly recession resistant. I want to, we, we have four questions. We ask every guest that comes on the show at the end here, but before we get there, I just want to kind of get your take on the outlook for 2022 with the backdrop of interest rates, a lot of talk about inflation.

 

And it seems like we're going to have, like you said, a spill over effect from 2021 into 2022. So, you know, what, what do you see going forward? What, what type of things should we be on the lookout for?

 

Raymond (28m 25s): Well, you know, the, the interest rates will be interesting, whether that impacts consumer spending and it has slowed down a little bit and whether or not that impacts the, the GDP, but I don't think that the increase in interest rates are going to impact the appetite for commercial investments. So I still think that's going to remain strong for this year, just because the availability of capital. And we look at, you know, the 10 year bond versus the chiropractor.

 

There's still a huge gap there, even though with this increase in interest rates. I think on the office side, we have to wait and see the next couple of months with, with, in, in Ontario with the reduction of, of re re restrictions. But I also think that we're, we're probably going to see a increase in lease activity compared to, to a year ago. So I think that's, that's a positive because just the natural flow of some of the lease expirees and, you know, is a, is a it's of course industrial is going to remain strong, not, not a lot of demand on a supply and the same thing with the other asset classes, with respect to apartment, as well as land.

 

The cool thing about land is, you know, that's a good bellwether with, you know, especially what's happened in the residential side and you look at places like calidad and you look at north of Barrie, the 4 0 1, the four, one quarter Southwestern Ontario, and you've seen a lot more sort of acquisitions or, or activity there and that sort of that next play or the next growth based on that, you know, the, the, that, that urban growth of, or expansion outside of the GTA and more into the sec secondary and tertiary Americas, especially based on housing affordability.

 

So I think 20, 22, we're going to see, I don't see any major hiccups by again, there's going to be some surprises that noises in the, in the market and whether that, that slows it down, it'll be interesting to watch, but I don't really see anything that will sort of take down the market at this point.

 

Jesse (30m 39s): Okay. You heard it here first. All right. We've got four questions. We ask every guest. I promise they're a, they're easy Raymond. So if you're ready, all a LABA, Matt. Yeah.

 

Raymond (30m 47s): You didn't give me these questions.

 

Jesse (30m 49s): Oh, I know it wasn't

 

Raymond (30m 50s): In the notes.

 

Jesse (30m 50s): Absolutely. This is a rapid fire. So what's something that, you know, now in your career, it can be in business or real estate that you really wish you knew when you first started out.

 

Raymond (31m 5s): No, it's, it's all, as you know, with, with commercial real estate, it's a small group of, of people proportionally and it's, it's about relationships. It's, it's about networking. Right? And I, I, and if, especially with people I started out with about you over 30 years ago, and we're still friends with, and we're solid in the industry together. And I was also found is, is it's people like to cooperate, but one of the main things I want to follow, especially this is why I tell people when they started out be famous or one thing, be very good at it and be known for that particular area, for people to seek your advice or to seek your help in solving their problem.

 

Right? So one the whole relationship, but two as well as be known for something and be, and be your best at it.

 

Jesse (32m 2s): So that's a great segue to our second question. Wanted to just get your thoughts on mentorship for individuals coming into our industry. And perhaps we can even specify a little more because of your background for individuals that may be, I want to go into whether it's B B on the economist side, the research side or data, you know, what would be advice for, for those types of individuals?

 

Raymond (32m 26s): Yeah, I, okay. I have a bias here because I, I love research and especially with both, you know, the broken firms and our firms that if you want to get into the sector that brokerage and, and sort of the service companies are, it's a great place to learn the business because you're starting out at junior level, you're exposed to very smart people and very good experience. And in the industry, and you, you learn through research through reading reports and you sort of develop your expertise.

 

And plus what I said earlier, that all of us, we really, we really want to help and watch that second generation grow, that that's basically going to replace us, right? So we want to see them succeed. So very open to discussions or opinions, and we tend to refer people over as well to, you know, you should really speak to this person regardless of the industrial sector, the best in that, in that, in that area. But I find that people are willing to, to talk which, which, which really helps the, the growth of the sector.

 

Jesse (33m 35s): Yeah. I do think that's one thing, at least in, in the tunnel vision of our industry, that I find people are very open to. They like to see younger people, especially if those younger people are motivated, what is a one or two books that you find yourself recommending all the time?

 

Raymond (33m 53s): Yeah. This goes back as that, that good to great series, try to stay within your, the certain element of, of stretching, but make sure you understand what, what, what your core value is or what, what is that company? What does it represent? Right. And again, as, as being more to focus on your strengths, the other book is Freakonomics and the way they look at the economy and the way they look at different data elements that may not seem relative to, or related to that trend, you're looking at that you need to look at other things and, you know, be a little bit more flexible and open with different ideas and different feedback, different perspectives from different people.

 

But what really got me was the data element and how certain things that you wouldn't think are related are related and how that sort of impacts that future growth.

 

Jesse (35m 1s): Yeah. That's, I mean, it's just a book where if you, can you put forth applied economics in a, in a fun and an easy to understand or memorable way. Yeah, absolutely. All right. Last question. First car, make and model

 

Raymond (35m 15s): Onto the court

 

Jesse (35m 17s): Right on. I thought it was going to get something exotic. Raven. Usually when I have the seasoned vets in here, I get a, I get some, you know, 1970s or 1980s Unique.

 

Raymond (35m 28s): I am a researcher. It doesn't go that one.

 

Jesse (35m 32s): Yeah. Pretty simple. All right. My guest today has been Raymond Wong, Raymond, thanks for being part of working capital.

 

Raymond (35m 39s): Boom fun. Thanks, Jesse.

 

Jesse (35m 49s): Thank you so much for listening to working capital the real estate podcast. I'm your host, Jesse for galley. If you liked the episode, head on to iTunes and leave us a five star review and share on social media, it really helps us out. If you have any questions, feel free to reach out to me on Instagram, Jesse for galley, F R a G a L E, have a good one. Take care.