The CRE Report: Andrew Kirsh Uncovers the Future of California's Commercial Real Estate Market

THE SELF STORAGE REPORT — EPISODE TRANSCRIPT Episode: The CRE Report: Andrew Kirsh Uncovers the Future of California's Commercial Real Estate Market Guest: Andrew Kirsh — Co-Chair and Chair of Real Estate, Sklar Kirsh LLP Host: Chris Berg — Abernathey Development Recorded: January 9, 2024 Video: https://www.youtube.com/watch?v=72mQLiFNUWY Key topics: Measure ULA and LA's 5.5% transfer tax; $2.4B in Q1 deals vs. 260 the next quarter; Sklar Kirsh; Latham and Watkins; downtown LA office exodus to Century City; the Aon building deal; San Francisco hotel and office distress; President Xi's visit; the 2028 Olympics and 2026 World Cup; Venice Beach, CD11 and Traci Park; the builder's remedy; San Diego's 2024 transfer tax measure; capital flight to Texas, Florida, Phoenix and Nashville; Blackstone's $250 billion of dry powder; California's 12-13% income tax; a bullish 2024 outlook Note: Speaker attribution reconstructed from raw captions. Light cleanup of transcription errors only; wording preserved. Timestamps and YouTube chapter markers removed. Turns marked [attribution inferred] could not be attributed with certainty. ————————————————————————————— Chris Berg: Welcome to the commercial real estate report. Today we're talking about which city is going to come back first — will it be Los Angeles or San Francisco? That and much, much more. I'm your host Chris Berg, head of business development here at Abernathey Holdings. We build Class A self storage in California and Arizona. As you can see, you got a very special guest joining us today. He is the co-chair at Sklar Kirsh, also the chair of the real estate development aspect of their firm. He's got his own podcast called Real Talk Real Estate Discussions, and, oh by the way, played a little center field at Northwestern University — Andrew Kirsh. Andrew, thanks for the time, and it's great to see you. Andrew Kirsh: Yeah, Chris, I appreciate it. Thank you for having me on your podcast. I love being on the other side of, uh, of the screen here. Chris Berg: Well, we really appreciate it. You and I had a great conversation last week, so I want to touch on some of the things that jumped out to me in that conversation. Just start with really your background. I mean, grew up in Beverly Hills, obviously as I mentioned went to play some baseball at Northwestern, but came back to SoCal. So why real estate law? Andrew Kirsh: Yeah, gosh. So, uh, let's see. So went to Northwestern, uh, for undergrad and law. Uh, started my career at Latham and Watkins, uh, really started in the litigation department. Uh, you know, 9/11 occurred, and uh, the first couple years it was mainly litigation. And then, um, you know, I gravitated to real estate. Uh, for 1 reason: uh, I didn't want to litigate anymore. I just — to fight for a living, to argue, uh, incessantly over, um, I don't know, discovery matters and letters and just things that didn't move the needle. And I always felt, uh, myself as a deal maker, not a deal breaker. I wanted to build things, be part of something productive, not destructive. And the real estate transactional group, uh, seemed to have a personality at Latham that resembled mine, um, of being entrepreneurial and just rolling up our sleeves and trying to get something done. Chris Berg: It's so interesting to hear you say that, because we're actually buying a piece of dirt right now in Moreno Valley, and the seller is always talking about, no no no, don't deal with the attorney, Chris, they're always the deal breaker. So it's — say an attorney, you're the deal maker. You may get some new clients just with that kind of point of view. Andrew Kirsh: Uh, look, it's just part of my nature, and the people that work here at Sklar Kirsh, I try and instill that. Uh, don't just pose issues and problems without posing a solution. Uh, our clients don't hire us to kill deals, they hire us to figure out — to make them work and to close. Obviously we need to identify the pitfalls and the risks, um, but we're here to close deals. Chris Berg: One of the things that jumped out to me in our conversation last week — so when I first was coming back to California, to come out here and, uh, find land, build self storage, people — like, I was at Vegas at the International Self Storage Expo and people would literally laugh at me, Andrew, like, what are you doing going to California? Like, it's so hard to do business there. And you and I talked last week and you said, hey Chris, like, I'm still seeing deals, they're just not getting done in California. So what is that missing piece, or if you had a magic wand, what needs to start to shift or change in California to say, hey, we're open for business? Andrew Kirsh: It's a great question. So, you know, I'm sitting here in LA. Uh, it's a — well, it was a little cold this morning, but it's relatively beautiful, uh, compared to the rest of the country here in January. And, you know, our peers love living in Los Angeles, or most of them, because a few have moved, but for the most part — although the vast majority of my client base live and reside in Southern California, the majority of their transactions are outside of California. Um, a lot in the Sun Belt: Phoenix, Vegas, Texas, Florida, Nashville, the Carolinas. Why? Uh, I think 2 reasons. 1, just easier to do business in those states. 2, uh, they perceive those areas as areas that will continue to have job growth, uh, and for — on the residential side, more residential tenants, uh, living there; on the office and retail side, just more businesses, more commerce, more people. Um, and, you know, being a born and bred Los Angelino, um, that's sad. You know, that's sad that yes, we want to live here because of the weather and the topography, the mountains, the beaches, um, but most of my, uh, clients and peers don't want to do business here. Chris Berg: So from a purely real estate perspective, what kind of changes or shifts would you like to see happen to maybe reinvigorate some of the investment in the state? Andrew Kirsh: Yeah, I mean, look, first and foremost, the law that got passed last year, um, uh, ULA and the transfer tax. And what was marketed and publicized as a mansion tax was — and is — a tax off the top, 5.5%, whether you lost money or made money, on the gross sales proceeds. That tax has been so — just a visceral reaction across the entire real estate community, capital markets, equity, debt, principals — of such an adverse reaction where, um, that seemingly is the straw that has broken the camel's back. And a lot of groups that are in New York and elsewhere do not want to do business in LA, uh, and other communities in California that have these really draconian transfer taxes. That's just 1, uh, example. Um, other examples are just how challenging it is to develop, uh, specifically in LA and other surrounding communities — Santa Monica, West Hollywood, Beverly Hills. You know, there is this thing called the builder's remedy that the state has, in forcing cities to build if they haven't gotten a certain number of, uh, new apartment units, uh, built by a certain time period. But just, there's so many hurdles and roadblocks that make it challenging to build of scale in California, that a lot of our developer clients have chosen to build elsewhere. Chris Berg: It's interesting to hear you say that. I want to jump into the ULA mansion tax in a moment. I mean, from a marketing standpoint — I'm a marketer — they did a brilliant job the way they branded it as the mansion tax. But to back up to what you say, you know, RJV is a billionaire hotel developer and he talked about the — what you're alluding to — but he said that's exactly why we want to be in California: it's a high bar, it's tough to build, there's not a lot of competition. So if you can get things done, it's probably going to be a tremendous asset long term. Andrew Kirsh: Yeah, I have clients that do have the contrarian view like you just, uh, mentioned, that they, um, they know there's less competition to develop of scale here. And so if they have the wherewithal, the money, the patience, uh, to go through the headache, to go through the cost, to go through the litigation — because it's too easy for plaintiffs to be formed and prevent development from happening, it just is too easy for roadblocks to get created — um, that if you're able to survive all of that and get your project approved, yeah, you're going to end up making a lot of money. Um, but it also scares a lot of groups away. Chris Berg: I want to share with you — I don't know if you've seen this data, maybe you have, maybe you haven't — but there was an article I read after a conversation about the ULA, again AKA the mansion tax, and the numbers are just stunning. I tweeted this out after I saw it, but just to share with you, and I want to get your reaction. And I guess the biggest question I want to get to with you, Andrew, is: how did people miss it? Right? When you look at the numbers — so pre-mansion tax there was $2.4 billion in deals getting done in Q1. Right, great number. Post-ULA, and just the next quarter, 260. I mean, it's like almost a 10-fold decrease. And so I wasn't here at the time — how is it being pitched, why did it get pitched so effectively, and what were the voters missing to not realize, wow, we're going to lose 10x in deals? Andrew Kirsh: Yeah. Um, so a couple different ways to answer your question. First, look, the market has slowed down, but the market was slow in Q1, so it's not fair for the government to just pinpoint it on the market being slow, because it's been slow since really the summer of 2022. So we've been in an 18-month period of an illiquid market where transactions have fallen dramatically compared to 2021 or even pre-COVID. Um, obviously the uptick in Q1 was everyone wanted to close their transaction before March 31st, because on April 1st of 2023 ULA kicked in. Why were we as a community, as a real estate community, asleep? Um, that's a question that political scientists should figure out, because there was so much emphasis on the mayoral election of Rick Caruso and Karen Bass, and I went to many Rick Caruso events — no one spoke about ULA. And you would have thought that people were speaking about ULA. Um, and then towards the end of the election cycle, October, last couple weeks of October, there were some rumblings: hey, there's this ballot measure, it's not really just on single family homes, it's on all assets, uh, this has a good chance of passing. And I don't think anyone believed that it would pass, because there were other measures that got defeated with respect to expanding rent control, with respect to property tax bifurcation that would have partially done away with Prop 13 — those didn't pass. So I think those in the real estate community felt that, based on those prior elections, ULA was not going to pass. It then passed, and the next day everyone was wondering what the hell just happened. Chris Berg: And now, um, yeah, let me ask you a question about that, and this may be a thing you need to dance between the raindrops on, but what I want to get to is: were people that tone deaf? And what I mean is, when you just look across the country right now, there's definitely a "hey, let's go get the wealthy," right? And so knowing that it was dubbed as a mansion tax, I think it was pretty easy to see what's going to bubble up from below. Why were people not more privy to that, or seeing that landscape, not just in LA — I would even say especially in LA with the cost of living here? Andrew Kirsh: It just — they weren't. And I think those that were in favor of ULA and sponsored ULA, um, did a great job marketing it. Uh, I don't even know how you could get away with a title of a bill and market it as purely a single family residential, uh, impact, when it impacts all commercial real estate. And worse than that is, it is just a tax on the gross purchase price and doesn't take into account at all whether the property owner made money or lost money. Um, it's really quite an impactful tax to the negative, uh, and has changed people's and investors' outlook on whether to do business in LA. Santa Monica has their own now. San Diego, um, has a similar transfer tax measure coming, I believe, in November when the presidential election, uh, is happening. And so a year out, they have gone to the commercial real estate and other, uh, focus, uh, industry groups and special interest groups to make sure that everyone is educated on what the effects of this tax would do to San Diego as it has to LA. Uh, and so with this, um, head start, those that are opposing that tax feel that they can defeat it. Chris Berg: So what would you say to the people of San Diego? Andrew Kirsh: Look, this, uh, this tax — although with good intentions, because I know those that supported ULA, um, wanted to earmark the money to combat homelessness — but it just hasn't made a dent, because the real estate community, um, will not transact in the same volume because of how significant of an impact it has on their bottom line. And money is fluid. Money doesn't just need to go to California. Money will go to these other communities in Texas and Florida. The money may choose not to live there — right, the people who have that money — but they know that they will make money in these states. Um, so that's what we're dealing with. Chris Berg: You know, it's interesting that you bring up that, hey look, it had good intentions — we all know what happens oftentimes politically with good intentions. I don't know if you want to breach this conversation, so I'm just going to put it out there, and if you want to answer, great. But I saw a recent stat, I think in the last 4 years the state of California spent 17 billion — with a B — billion dollars on the homeless situation, and it got worse. So it's just stunning to see, you know, what took place there. Um, if you want to comment on that, great; if not, let's move on. Since you're talking about LA, San Diego — you recently said you, um, read a book about San Francisco, so would love to hear some context around that, and then get into what I asked you last week, is like, what is San Francisco going to do? I mean, you've got these people now that are handing the keys back to the banks for hotels, offices. Like, you lose that tax revenue, most would presume that's going to create some budget problems. Andrew Kirsh: Yeah, I mean, the book was San Francisco. Um, I learned about it at a YPO conference. Um, uh, look, it's sad what's going on in California. Um, the homeless situation has gotten worse every year. Uh, there's a lot of factors as to why it has happened, um, but we haven't seen the results. Uh, I know you spoke about San Francisco, and we can talk about San Francisco, but just looking at downtown LA — I worked the first 8 years of my career, from 2000 to 2008, in downtown LA. It was, you know, right smack in the middle of the revitalization of downtown LA. Staples Center was built, uh, grocery stores were being built, apartments, retail, bars. Just, it became, or was trying to become, a 24/7 city. COVID hit, and uh, the rise of crime and homelessness in literally just a year or 2 has overturned the 30 years previously of what the city was trying to do with downtown. Um, and there is an exodus of major office tenants in downtown LA to Century City, uh, and other parts of LA, because people did not feel safe walking around downtown LA. They did not want to go there. And um, it is a challenged market. Uh, San Francisco — although I don't live in San Francisco, we certainly do a lot of deals there as well — similar situation. Uh, hotel clients of mine, um, have significant headwinds and challenges, as uh, there's fewer, uh, office travelers, fewer business travelers. Um, the city is hurting. Uh, people don't want to walk there. They literally have to walk around, uh, you know, homeless people and literally feces, uh, on the street. And except — when you and I talked about this — when the premier of China came to visit, then all of a sudden it got, uh, clean. Uh, temporarily, or maybe longer. But uh, um, it took that to at least temporarily clean up the streets. Chris Berg: That was stunning when you saw some of the San Francisco — talk about it, just like, wait a second, what's happening here? You mean this, it can get done, but only when a foreign diplomat, you know, leader shows up. Um, quickly on San Francisco — I want to back up to LA for a moment, but a good friend of mine, and I won't name any names, but works for a major, major real estate company, and I asked him, I said, hey man, is it as bad as the media says? And he's like, no, it's not that bad, you know, we were on a trolley the other day with a family from Alabama, they thought it was okay here. And yet the CEO of this major, major, major real estate company got mugged, like, right outside his house in a very nice area. So it's interesting, the anecdotes. But I think what's really sad is, like you mentioned, all of a sudden President Xi shows up and it's pristine, when typically it's not. I want to ask you about what you mentioned with LA, because I think there's a lot of different theories here. I'm curious what your thesis is on — you said, hey Chris, we got the COVID and all of a sudden 24 months basically destroyed 30 years. What was, like, at the root, or what do you think the root cause is that caused that, that — I don't want to say destruction, but going in the wrong direction? Andrew Kirsh: Um, I mean, it's the homelessness and crime and safety, and not feeling safe of just walking through the streets of downtown LA. Um, uh, you contrast that with Century City, and uh, look, it looks different than LA, or downtown LA, and the size of the streets are different. I'm just looking out my window. Um, it's not as dense. But, you know, we don't have the same homelessness issue in Century City. In fact, you rarely see a homeless person in Century City. Uh, you know, the mall is a big driver of economic activity in Century City. Downtown doesn't necessarily have that, but they have retail, uh, you know, throughout the city, um, or throughout that downtown region. Um, in the end, when you see major law firms that I used to work for, major investment banks, major private equity companies moving their headquarters from downtown LA to Century City, it just is — it's telling you something. It's telling you that the business community does not want to be there, that they're just — it's not worth the drive anymore, 30, 45 minutes, 60 minutes, 90 minutes for some people. And um, they are willing to pay higher office rents because they're getting more for their money. They're getting a better product, um, a safer product. Now, I'm going to say the flip side, because I have multiple clients who recently have gone all in on downtown LA, uh, on a contrarian view that if they buy, um, the real estate, uh, at a good price — and, you know, lenders have taken over many of the Class A office buildings in LA that we've read about, and I was involved in one of the high-profile transactions at the end of the year, the Aon building, um, transaction, which has been publicly discussed — uh, that at that right basis, uh, and the right, uh, you know, leasing packages, that they feel that they can bring the right group of tenants to their building. But they need help from the city in cleaning up downtown LA. That help may come from — we talked about President Xi visiting, uh, San Francisco — well, that help is coming in the form of the Olympics in 2028. And there is a view that the city does not want to have downtown LA looking the way it looks today. And so if we're going to have tailwinds of city support of improving downtown LA, then my clients who are betting on office today, they may, uh, be able to do very well with those investments. Chris Berg: You bring up such a good point. You've been reading my mind a few times today, which has been incredible. And I wanted to get to the piece around, um, one of the things you said last week that jumped out to me. You said, hey Chris, I think San Francisco is going to come back faster than LA. And I want to put in a couple caveats here, that the latest news is this may change because of the owner of the Rams doesn't want to change the field, but the World Cup in 2026, the Olympics in 2028 — I mean, that's a lot of infrastructure investment, a lot of investment, and I think a lot of investment within security as well. So putting those caveats in, do you still agree that you think San Francisco bounces back faster than LA, or what's your take? Andrew Kirsh: You know, San Francisco has a dynamic tech community. Uh, you know, they have Silicon Valley where there's a lot of, uh, office product. Uh, downtown San Francisco is just one of the most beautiful downtowns in the world. You know, reminds me of, uh, Sydney. Uh, just a little cooler, uh, cold in temperature, but you don't get that type of ocean views, topography, the bridges. It's just a very aesthetically pleasing city. And it's smaller, and so there's less, uh, of a total, uh, footprint to occupy. Um, I feel that downtown LA, you know, has a lot of competition — from Century City to Santa Monica to Culver City to Pasadena to part of Hollywood. There are other places that people can go to and office and live and recreate, um, that it may be challenging. Now, I hope my clients are right, and that they bought it right, and they feel that, uh, there's no way the city of LA will let downtown LA decay when the Olympics are 4 years away. And that sounds like a very sound bet, right? Uh, when the entire world is coming to your city, and downtown LA will be a focal point. Um, you can't have your downtown LA looking like it has the last couple years. Chris Berg: You know, you bring up some really interesting points, and I'm curious: do you think that is going to be a policy change or a leadership change, or both? Andrew Kirsh: Um, both. Look, obviously Karen Bass wants a clean, uh, LA and a safe LA. It's just a manner in which she and the city council are going about and doing it. And uh, um, if you look at Venice Beach — and Traci Park is the city council person in CD11 there — and before she, uh, assumed office, uh, Venice Beach was arguably one of the most dangerous places in the country. Uh, a homeless encampment that stretched for multiple miles. Chris Berg: Wow. Andrew Kirsh: Uh, that has improved significantly. So there's a will by the people, there's a will by leadership. Um, it just has to happen, you know, citywide. Chris Berg: As you're sharing that, I go back to San Francisco and — I want to wrap this up to be respectful of your time in a minute here — but I think about President Xi, what you just said about a will of the people, will of the leader. And me coming from North Dakota, you know, I drive around the state and I'm like, it's such an amazing place. I don't care what anybody says, it is such an amazing place. And I drive around going, wow, if there was — and I don't want to get political — but just different policies in place, like, this state would be Florida times a million. So just your reaction to that. Andrew Kirsh: It should be, and uh, it is. I mean, I've lived here other than going to college and law school at Northwestern in Chicago. Uh, I don't know of another place that offers as much as California offers. It is gorgeous. For recreation it has everything, and business opportunities. Even though we started the conversation, you know, talking about how, uh, there are a lot of business unfriendly aspects of California, um, there are still a lot of attributes that the state has. But my fear is that the politicians — that they don't believe that enough Californians and enough businesses will move to the states that we are transacting a lot in. I think they feel that the weather and the topography are so enticing that there won't be the exodus that everyone's talking about. Look, I don't know. I think the proof is in the numbers, and a lot of people have moved. I know, um, DeSantis and Newsom had that debate and they're all picking the numbers they want to look at. Um, I know it's anecdotal, but just my peers — how people have left, people have moved to Dallas, they've moved to Austin, they've moved to Phoenix, Vegas, Florida. Uh, my next podcast that I'm doing, it's 2 guys that, uh, built a business in LA and they moved to Miami. They're never coming back. I mean, they'll visit here, they'll visit their colleagues here, they will not move back from Miami. And you would never have heard that 5 years ago. Chris Berg: So what did they say to you? Because — and I'm going to ask in this context, um — again, the gentleman that we're buying some dirt from, he owns a really nice home in Beverly Hills, and he's like, as soon as I saw — because I'll give you the context of the story: I was at the Burbank Airport, um, flying somewhere, and I bought a cup of coffee, again I'm from North Dakota, and there was, like, a sustainability fee tax on my receipt. Right? So I took a picture of it, put it — and it just blew up on social media. And I texted my buddy and he's like, dude, California's doomed, as soon as I sell my house I'm out of here for good. And it just — it's so sad to me, because it's such a great state. So what did your buddy say, hey man, I'm out, I'm never coming back? Andrew Kirsh: You know, it really just goes to what we've been talking about, that they feel that there's just an ease of doing business. But more important than that, they feel that businesses are more welcomed, and that it's not a challenge, that the real estate — you almost feel like in the real estate business, that at least for my clients, and I'm an investor in many deals, that it's like us versus them, as opposed to wanting more real estate, wanting more developers, wanting to help the affordable situation. Well, you got to build more. And there's this combative relationship between government and business owners, uh, and that doesn't seem to be there in these other locations, where it's more welcoming of their presence. Chris Berg: I don't know if you remember this, but this is what really, I think, kicked things off, was when Mayor Suarez from Miami tweeted out "how may I help?" Right, when people were upset with Silicon Valley. And boom, obviously it opened the floodgates. And now you see — I mean, when Citadel's moving to Miami, it's like, okay, there's a really serious capital flow happening right now. Andrew Kirsh: Yeah, and look, obviously the state tax situation is significant, right, and that's a driver for a lot of businesses. And it's — I wonder, like, why am I paying, what is it, 12, 13%? Uh, what am I getting, you know, when the public schools are in the situation that they're in, and the roads and the infrastructure and the homelessness and the crime? So what am I getting from my additional 12, 13%, uh, as an ordinary income taxpayer? And I think that's what frustrates a lot of people. Um, and I get the counterargument is, oh, the real estate taxes may be more, there's other hidden fees and this and that, and their weather's not as good. I get all of it. But when you take a yellow pad and you put all the pros and all the cons, um, uh, a lot of my peers and clients have decided that the pros outweigh the cons. I just don't think you would have seen that even as recently as 5 years ago. And I think COVID exposed that difference, when you were able to move around, see other parts of the country, see other parts of the world, uh, and still be in touch with everyone. People got to see what there is out there in other places. Chris Berg: Andrew, thank you so much for the insight and the time. I really hope we can do it again. It's been a great conversation. Again, to be respectful, want to begin to wrap things up, so I want to give you a chance — last word, anything else you want to add or share that I'm not asking you? Andrew Kirsh: Look, we're at the beginning of the year. I know the last — I talked about the last 12, 18 months has been an illiquid market. Uh, I'm really bullish on 2024 and 2025. Uh, there's a lot of pent up demand. We have raised a lot of funds, uh, for clients that are — look, the capital is out there, they're looking to deploy it. They're waiting for, you know, the fundamentals to come in line, rates to come down a little bit, you know, cap rates to smooth out. Um, and I just see this year across all asset classes to be an active year. Will there be bumps? Sure. We've seen the bumps in office already last year, we're going to continue to see bumps this year. Multifamily, there's a ton of financings that are coming due this year — we could do a whole podcast on that. There will be bumps. But at least what we're going to see, you know, there will be some winners, there will be some losers. The last 18 months it's been frozen. There will be more transactions this year, more opportunities for people. Um, so I'm just excited, uh, as we're starting this new year fresh. Chris Berg: Very well said. I saw an interview with Steve Schwarzman from Blackstone, said, yeah, we got a fund with 250 billion we're sitting on just waiting to be deployed. So... Andrew Kirsh [attribution inferred]: Exactly. I think that's why we're not going to see as much of a decline as people are anticipating. Unlike 2008 and 9, those funds were not there, there was no safety net, things crashed. There's so much money waiting to pounce, that how far can prices fall? Office, I've seen it, because the capital didn't want to go into office. But the safety net is there for the other asset classes, so I think it's going to be a softer landing than most people think. Chris Berg: I want to talk your podcast. I saw the episode with Ethan Penner — you do a great job. So if people want to find out more about you, check out your podcast, how do they do that? Andrew Kirsh: Yeah, so, Real Talk with, uh, Andrew Kirsh. Uh, I'm on wherever you could find your podcast. Uh, they could reach out to me directly, email me at akirsh@sklarkirsh.com, and I'll make sure they can get on my email list. And uh, Chris, I just really appreciate you. Chris Berg: Well, look at that, it's already on there. Uh, yeah, I think I may have put an L in there when I shouldn't have, but, you know, here's the name of the podcast if you want to check it out. Let me get rid of this L so people can, uh, get the right information. But you said Sklar Kirsh, correct? Andrew Kirsh: And that — yeah, oh yeah, there. Sklar is S-K-L-A-R, uh, and then my last name. Chris Berg: So I did have it spelled right. Okay, good. I thought something — I was like, but maybe I heard him say it wrong. So yeah, let me get this up here correct for — there you go, Sklar Kirsh. Andrew Kirsh [attribution inferred]: It's my LA accent. Chris Berg: That's how I had it at first, so I like — man. Um, but great conversation. Again, let's do it again, because you just said, hey, we could talk all about the multifamily, which I agree, I think that's one of the next shoes to fall. And um, just keep up the great work, and anything we can do for you in the future, let us know. Andrew Kirsh: Okay, thank you. I really appreciate coming on, and you do a great job. So uh, thank you. Chris Berg: Thank you, man, that was fantastic. Check them out again, sklarkirsh.com. If you know somebody out there, maybe want to jump on his podcast with him, he does a fantastic job there as well. I'm Chris Berg, this is the commercial real estate report. — END OF TRANSCRIPT —