May 6, 2025 • 23 mins
Watch Alix and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Alix Steel
Today’s Podcast Features are:
-Ros Mathieson, Bloomberg News Director for Europe, the Middle East and Africa, discusses German Parliament backing Friedrich Merz as German Chancellor.
-Mandeep Singh, Bloomberg Intelligence Senior Tech Industry Analyst, discusses DoorDash announcing two multibillion-dollar acquisitions: buying London-based delivery company Deliveroo Plc for £2.9 billion and hospitality tech company SevenRooms Inc. for $1.2 billion.
-Bess Freedman, Chief Executive Officer at Brown Harris Stevens, discusses the state of commercial real estate. Topics include: CRE Lending Rebound Amid Lingering Uncertainty, Retail Sector Faces Ongoing Challenges, and Retail Sector Faces Ongoing Challenge.
-Pol Lezcano, BloombergBNEF Senior Associate, gives his outlook for clean energy. BNEF says clean energy buildout (solar, onshore wind and energy storage) in the US won't slow down despite Trump's efforts to build more fossil fuel power generation and nuclear.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Applecarplay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:24):
Balax Deal Paul Sweeney live here in our Bloomberg Interactive
Broker's studio. We're streaming live on YouTube as well. To
check us out there. So it took longer to expect it,
but Germany now has a chancellor. Ros Mathison joins us
Bloomberg News Director for Europe, the Middle East and Africa. Ross,
like most Americans, I woke up to this news and
(00:44):
then I was like, is that.
Speaker 3 (00:45):
A big deal? Apparently it's a big.
Speaker 2 (00:47):
Deal not getting kind of elected on that first ballot.
Can you give us the context of there?
Speaker 4 (00:53):
Well, that's right, I mean it was supposed to be
a pro former moment. It was just to set peace
vote in Parliament for him to be formally confirmed by
lawmakers as chancellor. Then he would go off Stark cabinet
and he was due to go to Paris tomorrow to
meet with the French leader. So it was all supposed
to roll off from there, and of course he'd already
(01:14):
done the work to get these big changes through Parliament
in terms of removing the debt break on Germany, big
package around infrastructure and defense. So it was quite shocking
to see this result given you know that he had
the numbers in theory to be voted through as chancellor
by Parliament. The question is who voted against him and
if so, why, And so we had this second vote
(01:37):
just a short time ago. He got over the line
he needed three hundred and sixteen, He got a through
three hundred and twenty five. So they got there and
now he will of course go off and be chancellor.
But the fact this happened is just a really negative
sign for the start of his administration and for the
difficulties that will lie ahead potentially getting stuff done with parliament.
Speaker 3 (01:57):
So would we.
Speaker 5 (01:58):
So he already didn't have a mandate, So then now
is it like an extra non mandate.
Speaker 4 (02:04):
Well, I mean he does. He does have a coalition
within his with his block and the center left Social Democrats,
so he's got a functioning coalition in Parliament. But it
just shows again that there are lots of strands against him,
even within that coalition, and that some lawmakers may object
to certain policies. It could be quite difficult to negotiate
(02:25):
changes to policy, including with the Social Democrats between which
they're in coalition. And what was the intention of these
lawmakers in voting against him in this minute was to
send a signal that you know, they are going to
be hard on some policy platforms with him, that they're
not particularly happy that his chance. It's really hard to
know what happened he today therefore the signals from it,
(02:48):
but it's not a positive start of confidence really in
his administration.
Speaker 2 (02:52):
You'd have to say, ros what is the job one
here for mister Marrison and his government?
Speaker 3 (02:57):
Now?
Speaker 4 (03:00):
Obviously he's worked already to get that depth break lifted,
which is a really important step for Germany to be
able to unshackle itself fiscally and to get these infrastructure
and infrastructure and defense packages moving. But also they've got
to now work out how to spend the money. You know,
there's a lot to spend it all with infrastructure, but
there's a lot of red tape also involved in bureaucracy,
(03:22):
and so how do you get this money flowing and
going where it needs to to? Really structurally kickstart the
German economy. Obviously a lot of external headwinds that you know,
this is Europe's significant economy to grapple with in terms
of the Trump administration, tensions on trade, you know what's
happening in the next steps in Russia's war, in Ukraine
(03:43):
and so on. In Germany needs to be a big
voice in all of that. So it's sort of internal
questions around the economy. But there's also the far right AfD,
which is the biggest opposition group in Parliament, could be
pushing him along on things like migration. So he's got
a bunch of domestic challenges, and then he's got the
external environment, which is like trade and Ukraine and much
(04:04):
much more.
Speaker 6 (04:05):
All right, ros, we appreciate it.
Speaker 5 (04:06):
Thank you so very much. Roz Matheson, Bloomberg News Director
for Europe, Middle East and Africa. Frederick Mertz getting the
backing of Parliament in a second vote for Germany's a
next chancellor. This is the latest ballot of lawmakers after
a failure in the first vote that came to a
shock as everyone market participants and politicians alike.
Speaker 1 (04:23):
You're listening to the Bloomberg Intelligence podcast Catch US Live
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Speaker 5 (04:39):
All right, let's keep going with the door dash theme here,
agreeing to by delivery in a less than of four
billion dollar deal three point nine billion dollars. Us Mandy
p Ssening, Bloomberg Intelligence senior tech industry analyst, joins us, Now,
what do you make of the price tag?
Speaker 7 (04:53):
Well, I mean it's not one of the expensive acquisitions
that we have seen with these online delivery companies. Multiple
is quite low. It's about you know, one point two
times ev do sales. So look, when it comes to
delivery companies, we know they have had their challenges with
profitability and that's why you know, Delivery, even though it
(05:17):
ipoed a few years back at a much higher valuation,
you know, the selling price is a lot lower because
of all the execution challenges they had. And in this case,
I think DoorDash has a proven track record when it
comes to showing better profitability than they appear, So you know,
(05:39):
it's it's an easy way for them to expand in
the UK market given most of their businesses here in
the US, and so it does make sense. I mean
the key question is can they implement their playbook and
make the delivery unit profitable in one to two years?
Speaker 2 (05:58):
And Alex, I know you're to know this information. JP
Morgan advised DoorDash and Allen and Company and Golden Sacks
advise a delivery U. So again, bankers getting paid.
Speaker 8 (06:08):
So that's what we like to see.
Speaker 3 (06:09):
I believe in that exactly. Talk to us.
Speaker 2 (06:11):
I'man deep about so, I'm a vowed I do not
support this home delivery of food thing, and my kids
know that, and I won't pay for it, and they
get put in a penalty box if I ever see
a charge on a credit card. Talk to us about
the economics of delivering food here in the US versus
delivery delivery use wherever they are in the UK.
Speaker 7 (06:31):
Yeah, I mean, look this, the three side marketplace businesses
are not the easiest to run in terms of unit economics.
And that's why you know, DoorDash has emerged as the
category leader because not only have they executed better in
terms of batching efficiencies and really making sure they optimize
(06:55):
the time of the person who is delivering the order,
but also they've been able to there on ads. They've
been able to layer on some technology solutions where they
would do the app or the website of the merchant
that they are delivering food from, so they will charge
them a fee for that. And all these small things
(07:15):
have added to their profitability in contrast to even an
Uber eats, which is not as profitable as a door Dashes.
So that just goes to show that scale is important
in this business, but also operational execution, and that's what
I think the door Dash team has delivered since their IPO.
Speaker 5 (07:38):
I guess the question for me is how much runway
is do these companies have, Like how can they grow
their total addressable market when in theory like you're not
going to use this in the middle of a suburb.
Maybe do in the suburb, but not in like a
rural area.
Speaker 7 (07:55):
I mean, just look at how much they have grown
since the pandemic, which is when they got the big bump,
and since then they've been, like DoorDash has been compounding
top line at a twenty percent keeger. And the reason
they've been able to do that is they're pretty much
doing all last mile delivery. I think Amazon Prime they
(08:16):
are doing that on the delivery side now with grocery delivery,
convenience delivery, and that is what gives you the batching
efficiency in terms of saying, hey, not only are you
helping me deliver food from the restaurant, but also pick
up this thing from the convenience store and also this
grocery So all these thinks I when you look at
(08:37):
the scale in terms of number of orders and GMV,
I mean DoorDash may do almost one hundred billion dollars
in GMV this year. So it just goes to show that,
you know, there is a market in terms of online
conversion of a lot of the things that used to
be done in store. And once you digitize the data,
(08:59):
you are able to layer on ads and people will
pay for convenience provided the costs are not that high,
which is why the delivery side is still a low
margin business. But it's all these ancillary services that makes
the company profitable and it comes with scale, so which
is what orda Asha has been able to achieve.
Speaker 2 (09:17):
Yep, absolutely all right, Mandeve, thank you so much. Sweeney
Offspring are still not allowed to use any of these
food delivery.
Speaker 3 (09:23):
Service so they do they still do once.
Speaker 2 (09:25):
On one will sneak by and then I shut off
the credit cards for I've seen it happen.
Speaker 8 (09:29):
Nothing makes me more angry than seeing a delivery at
the front door. Just go mental, exactly.
Speaker 2 (09:37):
It is convenience, but it's so expensive and just the
value is not there for me. All Right, Mandy, you've
saying he does that stuff for a living for Bloomberg Intelligence.
Speaker 1 (09:45):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarclay, and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (10:00):
Of the topics at Alex I like to revisit on
occasion is the commercial real estate business. Talking about a
business that was really impacted by the pandemic, particularly in
some of the larger markets like New York City, so
it's wrong. We like chatting with our next guest, Best Friedman.
She's the chief executive officer at Brown Harris Stevens. She's
joining us from New York City via the Zoom thing.
Best thanks so much for joining us here here on
(10:23):
Lexington Avenue, fifty eighth Street. We've still got a lot
of vacant retail. Talk to us about that part of
the market here.
Speaker 9 (10:32):
Yeah, I mean, I think you're seeing two different narratives.
You know, you're seeing openings, but you're also seeing a
lot of closings.
Speaker 6 (10:39):
And we're just not out of the woods yet.
Speaker 9 (10:42):
We started to see the early stages of what I
would describe as a moderate recovery. But there's still some
great challenges, specifically in places like New York City. In
San Francisco, I know, has similar challenges, and we need
to address issues like homelessness, crime, all of those sorts
(11:02):
of things need to be addressed in safety, and it's
impacting our city overall.
Speaker 6 (11:08):
And so we're getting there. We've made progress.
Speaker 9 (11:11):
Last year was better than twenty twenty three, for sure,
wasn't as good as twenty twenty two. And some sectors
are performing better than others. A multifamily performed really well
and it's continuing.
Speaker 6 (11:23):
To do so.
Speaker 9 (11:25):
And nationwide, vacancy rates are at something like seventeen percent
or in New York City at seventeen. I think nationwide
it's fourteen and so for the quarter one twenty twenty five,
So look, it's a mixed bag.
Speaker 6 (11:37):
There's some good and there's bad.
Speaker 5 (11:39):
What is the most misunderstood piece of the commercial real
estate market right now?
Speaker 9 (11:45):
You know, I think that you know you're hearing there
was a lot of doom and gloom that people were
talking about, you know, in early on after COVID, and
I think you've seen a decent recovery and the demand
is there, and there is demand for office space, just FYI,
I think that's misunderstood.
Speaker 6 (12:03):
There are people that do want to be in the offices.
Speaker 9 (12:06):
People are requiring it in New York City, and I
think that's a good thing. But the demand is for
quality and I think you know, the B and C
office spaces, we're gonna have to do something with those.
But I do think people have returned to the office,
want to be here, even if it's partial and there's
hybrid working. I think that you know, that is misunderstood.
(12:29):
There's not this sort of work from home across the country.
Speaker 2 (12:34):
Hey, best talk to those about just kind of the
lending markets here. Let's say I wanted to develop a
property or buy a building.
Speaker 3 (12:41):
Is my local bank going to be there for me?
Speaker 9 (12:43):
Depends, I mean, it all depends on what building, who
you are, you know, it's all of those issues.
Speaker 6 (12:49):
All of those things are are important.
Speaker 9 (12:52):
And you know, there are some loans becoming due at
the end of this year and next year. I think
next year, twenty two, twenty six, some loans are maturing
in the commercial realm. It's something like one point eight
trillion dollars, So that's what people are concerned about. But yes,
there is money out there and people will lend. It's
(13:12):
tighter than it has been. Credit has been really hard.
But at the end of the day, if you have
are somebody that has done projects and people will lent
to you and it's the right project and it makes
sense and you can prove it.
Speaker 6 (13:24):
Yes, but it's not what it was, you know.
Speaker 9 (13:27):
I think the economic uncertainty, the higher rates, inflation, even tariffs,
all of that stuff, you know, has people rethinking things
and being a little bit more cautious.
Speaker 5 (13:40):
I think everyone was kind of waiting for the big
fallout to happen and it never really did. Does that
eventually happen or is it going to be on sort
of property to property rolling basis over the long term.
Speaker 9 (13:52):
Yeah, I don't know if there's going to I mean,
predictions are impossible. We none of us know really because
every day is a different news story and what's going
on in the economy. So I don't know if there's
going to be some sort of huge fallout, if it's
going to get rougher.
Speaker 6 (14:10):
It could, but I do think it's depends.
Speaker 9 (14:12):
It's almost like if you look at retail, which is
a mixed bag. You see, you know, Walmart's opening up
and Trader Joe's opening up, but then you see Walgreens closing,
and so you know it's and so it just depends
on what it is. You know, there's it depends on
what is happening and what the business is and where
(14:33):
it is and all of those things.
Speaker 2 (14:36):
Best talk to us about South Florida.
Speaker 3 (14:39):
Is it still strong or is it rolled over?
Speaker 9 (14:42):
You know, South Storea, Florida is is doing well. It's
it's it's decent. It's it's it's steady. There's demand. Uh,
And you know, I think there was an article today
in the Journal about Florida and the demand for real estate.
There is decent people but want to be in Florida,
and there has been this sort of migration of businesses
(15:05):
moving to Florida, and so I think that has remained
the same. I don't see that changing anytime soon, so
we'll have to see all right.
Speaker 2 (15:14):
Best, Thank you so much for joining us. Always appreciate
getting your perspective. Best for reading. She is the chief
chief executive officer of Brown Harris Steven's giving us an
update on kind of global real estate. Again, a little
bit of uncertainty out there in just the overall economy
even finding its way into the real estate maybe not
going to hold off on a certain project, or hold
(15:34):
off on upgrading or something along.
Speaker 5 (15:36):
I feel like this reminds me of the default cycle
we were supposed to see in twenty sixteen, Like that
huge fallout that was supposed to happen that all the
private guys were all excited about.
Speaker 6 (15:46):
That huge wave didn't happen.
Speaker 5 (15:48):
It didn't mean there weren't opportunities, but that wave didn't happen.
It feels like something similar is also evolving in the
commercial real estate space as well.
Speaker 2 (15:56):
Yeah, and we were told by a lot of bank
anlysts that you'd see probably more in the small, mid
sized banks who maybe had some more local commercial real
estate and residential real estate as opposed to the large banks,
which really real estate is a small, small part of
their loan portfolio.
Speaker 1 (16:12):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (16:26):
Let's talk new energy finance. I don't know how the
whole new energy world is going to play out with
President Trump here. It just feels like, boy, that's a headwind.
But we're going to break it down. So we've got uh,
we have here, We've got Paul Ascano, Bloomberg BNF Seniors.
Sochit So, Paula, how do you guys think about wind, solar?
(16:48):
I mean, just all these new greener energies just frame
out for us kind of is it is this administration
a headwind to that? And if so, by what degree?
Speaker 3 (16:58):
Yeah? And thanks for having I'm back.
Speaker 10 (17:02):
Certainly, every industry we have to we have to look
at every industry separately and in conjunction. We have to
align to understand what are the common threats and then
what are the individual characteristics of each of those industries.
So so far we've we've seen obviously offshore wind has
been badly hit, mostly because offshore wind is heavily, heavily
(17:24):
reliant on federal agencies and federal authority, whereas solar has
been pretty much unstoppable.
Speaker 3 (17:32):
There's very little things.
Speaker 10 (17:34):
That Trump and the administration can do to really slow
down growth. And then battery storage with this nation, technology
that's coming to support both soul and win generation has
also been i would say somewhere in the middle. Not
as badly head as offshore wind, but tariffs have had
much a much bigger impact because the US still imports
(17:56):
a lot of the batteries from China, because the batteries
apply chain is not as diversified as a solar or
the wind supply chain.
Speaker 5 (18:04):
So you guys have a no doubt that talks about
how US clean power build will caudruple by twenty thirty
five despite all.
Speaker 3 (18:11):
Of these risks. That's a big number.
Speaker 5 (18:14):
So you mentioned that solar is unstoppable, battery and energy
storage potentially also, can you walk us through your outlook
for solar in particular.
Speaker 10 (18:21):
Yeah, the reality is the US and pretty much everywhere
in the world will need power. What's the fastest, cheapest
new source of power generation? It's solar like hands down,
It's easier, quicker, to build. If you can get the
permits and the great connection on time, which are really
the only bottlenecks to get to getting new solar built,
(18:44):
then it's very very hard to stop. And we've seen
that all over the world, especially now the US gas
nuclear there's a you know, there's talks about a renaissance
for both of these technologies. But the reality is is
that physical there's physicaltions to building gas and to building
nuclear that probably most of the audience is very familiar with.
(19:06):
With soul, you don't need pipelines, you don't need to
build new pipelines, you don't need to improve new pipelines.
You just grap panels, You install them, you connect them
to the grid, and that's it. And then you have
new source and new source of generation. And the reality
is that despite the efforts from the administration to revitalized
fossil fuels and nuclear, the easiest thing to build the
(19:27):
solar and it's and it's going to continue to be
to be like that for a long time.
Speaker 2 (19:31):
Well, talk to us about the towers here, Like, if
there's one hundred and forty percent tariff on a battery
coming in from China, doesn't that make a lot of
projects just unfeasible economically.
Speaker 10 (19:41):
Yeah, that's a great question. And there's certainly some battery projects,
big battery projects in parts of the US there are
going to be delayed. There's going to be probably delayed
by twelve to eighteen months as everyone figures out what
the final tariff.
Speaker 3 (19:54):
On China will be.
Speaker 10 (19:55):
But the reality is, if we look at what happened
to the solar sector and the global soular supply chain
back in the day when Obama started introducing high tariffs
on solar panels, supply chains re route very very quickly.
So we do expect eventually with the next couple of years,
if tariffs in China continue to be pretty high and
the risk of using Chinese batteries remains pretty high, irrespective
(20:17):
of what the tariff level is, we do expect some
new capacity coming online in South Korea and Southeast Asia
as well as in the US.
Speaker 5 (20:26):
What about battery storage and energy storage, So.
Speaker 10 (20:30):
Battery storage is as I said, it's what it's mower
hit for by tariffs and solar because of its reliance
on China. So we had to we had to re
assuming a slowdown in new additions because right now the
ramp up has been pretty quickly, but the role of
battery storage for power markets has been very, very critical
(20:51):
over the past couple of years. It has probably arguably
saved Texas from blackouts in the past twelve eighteen months
because the bit of batteries to ramp up quickly and
meet peak demand. It's it's it's really it's fascinating and
and it's really quick to dispatch, and and and we
think it's going to play a big and bigger role
(21:12):
in markets outside of Texas too in the US.
Speaker 2 (21:15):
How hard How hard is it to get connected to
the grid? If I build a wind farm in the
middle of West Texas like I saw on land Man,
they're off the grid.
Speaker 3 (21:23):
How do you get stuff to the grid. It's very
very difficult.
Speaker 10 (21:27):
The some of the difficulties are obvious when there's a
very very long distance between where you're building the farm
and where you want to deliver the power. So you
need to get transmission built, which means you need to
get everyone along the way who owns the land where
that transmission, where those transmission lines are going to be,
to approve to like allow you to build it, which,
as I'm sure you can imagine, is a very very
(21:48):
tedious process. You need different regulatory approvals, and then to
get connected to the grid, you have to undergo years
and years of different system studies where they have to
assess what's going to happen if your wind farm now
connects to the grid, what's going to happen to all
the power flows going in all directions. Imagine just doing
(22:08):
that study for one farm, and they do this for
pretty much everyone who's applying for the grid at the
same time or the same grid connection point. So the
engineering is really really complicated, and it's been by far
the biggest bottle night of getting any new source of
power generation.
Speaker 5 (22:25):
And yeah, is it easier to do that or build
a pipeline?
Speaker 10 (22:28):
Thirty seconds easier to do that than build a pipeline,
I would say, except if you're in Texas or Louisiana.
Speaker 5 (22:34):
Okay, well that's a fair point. Also, I'm obsessed with
the transformers, like the thing you need to plug into
the grid, like just that one piece of equipment is
the backlog is huge.
Speaker 8 (22:43):
Remembers the frequencies have to match as well, otherwise you
will have a big problems.
Speaker 5 (22:50):
Hence all the years of study and then also the
questions of how much alternative or intermittent energy you want
on a grid. Just ask Spain and they're blackout from
a couple of weeks ago. It was really great to
see you. Thank you very very much, Paulo Ascano. He
joins us from Bloomberg b n EF. They do all
the great research on energy across the board, whether clean
energy or otherwise. And they do technology and they do financing.
(23:13):
It's really quite interesting. You should definitely check out their research.
Speaker 1 (23:16):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:24):
Balax Deal Paul Sweeney live here in our Bloomberg Interactive
Broker's studio. We're streaming live on YouTube as well. To
check us out there. So it took longer to expect it,
but Germany now has a chancellor. Ros Mathison joins us
Bloomberg News Director for Europe, the Middle East and Africa. Ross,
like most Americans, I woke up to this news and
(00:44):
then I was like, is that.
Speaker 3 (00:45):
A big deal? Apparently it's a big.
Speaker 2 (00:47):
Deal not getting kind of elected on that first ballot.
Can you give us the context of there?
Speaker 4 (00:53):
Well, that's right, I mean it was supposed to be
a pro former moment. It was just to set peace
vote in Parliament for him to be formally confirmed by
lawmakers as chancellor. Then he would go off Stark cabinet
and he was due to go to Paris tomorrow to
meet with the French leader. So it was all supposed
to roll off from there, and of course he'd already
(01:14):
done the work to get these big changes through Parliament
in terms of removing the debt break on Germany, big
package around infrastructure and defense. So it was quite shocking
to see this result given you know that he had
the numbers in theory to be voted through as chancellor
by Parliament. The question is who voted against him and
if so, why, And so we had this second vote
(01:37):
just a short time ago. He got over the line
he needed three hundred and sixteen, He got a through
three hundred and twenty five. So they got there and
now he will of course go off and be chancellor.
But the fact this happened is just a really negative
sign for the start of his administration and for the
difficulties that will lie ahead potentially getting stuff done with parliament.
Speaker 3 (01:57):
So would we.
Speaker 5 (01:58):
So he already didn't have a mandate, So then now
is it like an extra non mandate.
Speaker 4 (02:04):
Well, I mean he does. He does have a coalition
within his with his block and the center left Social Democrats,
so he's got a functioning coalition in Parliament. But it
just shows again that there are lots of strands against him,
even within that coalition, and that some lawmakers may object
to certain policies. It could be quite difficult to negotiate
(02:25):
changes to policy, including with the Social Democrats between which
they're in coalition. And what was the intention of these
lawmakers in voting against him in this minute was to
send a signal that you know, they are going to
be hard on some policy platforms with him, that they're
not particularly happy that his chance. It's really hard to
know what happened he today therefore the signals from it,
(02:48):
but it's not a positive start of confidence really in
his administration.
Speaker 2 (02:52):
You'd have to say, ros what is the job one
here for mister Marrison and his government?
Speaker 3 (02:57):
Now?
Speaker 4 (03:00):
Obviously he's worked already to get that depth break lifted,
which is a really important step for Germany to be
able to unshackle itself fiscally and to get these infrastructure
and infrastructure and defense packages moving. But also they've got
to now work out how to spend the money. You know,
there's a lot to spend it all with infrastructure, but
there's a lot of red tape also involved in bureaucracy,
(03:22):
and so how do you get this money flowing and
going where it needs to to? Really structurally kickstart the
German economy. Obviously a lot of external headwinds that you know,
this is Europe's significant economy to grapple with in terms
of the Trump administration, tensions on trade, you know what's
happening in the next steps in Russia's war, in Ukraine
(03:43):
and so on. In Germany needs to be a big
voice in all of that. So it's sort of internal
questions around the economy. But there's also the far right AfD,
which is the biggest opposition group in Parliament, could be
pushing him along on things like migration. So he's got
a bunch of domestic challenges, and then he's got the
external environment, which is like trade and Ukraine and much
(04:04):
much more.
Speaker 6 (04:05):
All right, ros, we appreciate it.
Speaker 5 (04:06):
Thank you so very much. Roz Matheson, Bloomberg News Director
for Europe, Middle East and Africa. Frederick Mertz getting the
backing of Parliament in a second vote for Germany's a
next chancellor. This is the latest ballot of lawmakers after
a failure in the first vote that came to a
shock as everyone market participants and politicians alike.
Speaker 1 (04:23):
You're listening to the Bloomberg Intelligence podcast Catch US Live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch US live on YouTube.
Speaker 5 (04:39):
All right, let's keep going with the door dash theme here,
agreeing to by delivery in a less than of four
billion dollar deal three point nine billion dollars. Us Mandy
p Ssening, Bloomberg Intelligence senior tech industry analyst, joins us, Now,
what do you make of the price tag?
Speaker 7 (04:53):
Well, I mean it's not one of the expensive acquisitions
that we have seen with these online delivery companies. Multiple
is quite low. It's about you know, one point two
times ev do sales. So look, when it comes to
delivery companies, we know they have had their challenges with
profitability and that's why you know, Delivery, even though it
(05:17):
ipoed a few years back at a much higher valuation,
you know, the selling price is a lot lower because
of all the execution challenges they had. And in this case,
I think DoorDash has a proven track record when it
comes to showing better profitability than they appear, So you know,
(05:39):
it's it's an easy way for them to expand in
the UK market given most of their businesses here in
the US, and so it does make sense. I mean
the key question is can they implement their playbook and
make the delivery unit profitable in one to two years?
Speaker 2 (05:58):
And Alex, I know you're to know this information. JP
Morgan advised DoorDash and Allen and Company and Golden Sacks
advise a delivery U. So again, bankers getting paid.
Speaker 8 (06:08):
So that's what we like to see.
Speaker 3 (06:09):
I believe in that exactly. Talk to us.
Speaker 2 (06:11):
I'man deep about so, I'm a vowed I do not
support this home delivery of food thing, and my kids
know that, and I won't pay for it, and they
get put in a penalty box if I ever see
a charge on a credit card. Talk to us about
the economics of delivering food here in the US versus
delivery delivery use wherever they are in the UK.
Speaker 7 (06:31):
Yeah, I mean, look this, the three side marketplace businesses
are not the easiest to run in terms of unit economics.
And that's why you know, DoorDash has emerged as the
category leader because not only have they executed better in
terms of batching efficiencies and really making sure they optimize
(06:55):
the time of the person who is delivering the order,
but also they've been able to there on ads. They've
been able to layer on some technology solutions where they
would do the app or the website of the merchant
that they are delivering food from, so they will charge
them a fee for that. And all these small things
(07:15):
have added to their profitability in contrast to even an
Uber eats, which is not as profitable as a door Dashes.
So that just goes to show that scale is important
in this business, but also operational execution, and that's what
I think the door Dash team has delivered since their IPO.
Speaker 5 (07:38):
I guess the question for me is how much runway
is do these companies have, Like how can they grow
their total addressable market when in theory like you're not
going to use this in the middle of a suburb.
Maybe do in the suburb, but not in like a
rural area.
Speaker 7 (07:55):
I mean, just look at how much they have grown
since the pandemic, which is when they got the big bump,
and since then they've been, like DoorDash has been compounding
top line at a twenty percent keeger. And the reason
they've been able to do that is they're pretty much
doing all last mile delivery. I think Amazon Prime they
(08:16):
are doing that on the delivery side now with grocery delivery,
convenience delivery, and that is what gives you the batching
efficiency in terms of saying, hey, not only are you
helping me deliver food from the restaurant, but also pick
up this thing from the convenience store and also this
grocery So all these thinks I when you look at
(08:37):
the scale in terms of number of orders and GMV,
I mean DoorDash may do almost one hundred billion dollars
in GMV this year. So it just goes to show that,
you know, there is a market in terms of online
conversion of a lot of the things that used to
be done in store. And once you digitize the data,
(08:59):
you are able to layer on ads and people will
pay for convenience provided the costs are not that high,
which is why the delivery side is still a low
margin business. But it's all these ancillary services that makes
the company profitable and it comes with scale, so which
is what orda Asha has been able to achieve.
Speaker 2 (09:17):
Yep, absolutely all right, Mandeve, thank you so much. Sweeney
Offspring are still not allowed to use any of these
food delivery.
Speaker 3 (09:23):
Service so they do they still do once.
Speaker 2 (09:25):
On one will sneak by and then I shut off
the credit cards for I've seen it happen.
Speaker 8 (09:29):
Nothing makes me more angry than seeing a delivery at
the front door. Just go mental, exactly.
Speaker 2 (09:37):
It is convenience, but it's so expensive and just the
value is not there for me. All Right, Mandy, you've
saying he does that stuff for a living for Bloomberg Intelligence.
Speaker 1 (09:45):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarclay, and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (10:00):
Of the topics at Alex I like to revisit on
occasion is the commercial real estate business. Talking about a
business that was really impacted by the pandemic, particularly in
some of the larger markets like New York City, so
it's wrong. We like chatting with our next guest, Best Friedman.
She's the chief executive officer at Brown Harris Stevens. She's
joining us from New York City via the Zoom thing.
Best thanks so much for joining us here here on
(10:23):
Lexington Avenue, fifty eighth Street. We've still got a lot
of vacant retail. Talk to us about that part of
the market here.
Speaker 9 (10:32):
Yeah, I mean, I think you're seeing two different narratives.
You know, you're seeing openings, but you're also seeing a
lot of closings.
Speaker 6 (10:39):
And we're just not out of the woods yet.
Speaker 9 (10:42):
We started to see the early stages of what I
would describe as a moderate recovery. But there's still some
great challenges, specifically in places like New York City. In
San Francisco, I know, has similar challenges, and we need
to address issues like homelessness, crime, all of those sorts
(11:02):
of things need to be addressed in safety, and it's
impacting our city overall.
Speaker 6 (11:08):
And so we're getting there. We've made progress.
Speaker 9 (11:11):
Last year was better than twenty twenty three, for sure,
wasn't as good as twenty twenty two. And some sectors
are performing better than others. A multifamily performed really well
and it's continuing.
Speaker 6 (11:23):
To do so.
Speaker 9 (11:25):
And nationwide, vacancy rates are at something like seventeen percent
or in New York City at seventeen. I think nationwide
it's fourteen and so for the quarter one twenty twenty five,
So look, it's a mixed bag.
Speaker 6 (11:37):
There's some good and there's bad.
Speaker 5 (11:39):
What is the most misunderstood piece of the commercial real
estate market right now?
Speaker 9 (11:45):
You know, I think that you know you're hearing there
was a lot of doom and gloom that people were
talking about, you know, in early on after COVID, and
I think you've seen a decent recovery and the demand
is there, and there is demand for office space, just FYI,
I think that's misunderstood.
Speaker 6 (12:03):
There are people that do want to be in the offices.
Speaker 9 (12:06):
People are requiring it in New York City, and I
think that's a good thing. But the demand is for
quality and I think you know, the B and C
office spaces, we're gonna have to do something with those.
But I do think people have returned to the office,
want to be here, even if it's partial and there's
hybrid working. I think that you know, that is misunderstood.
(12:29):
There's not this sort of work from home across the country.
Speaker 2 (12:34):
Hey, best talk to those about just kind of the
lending markets here. Let's say I wanted to develop a
property or buy a building.
Speaker 3 (12:41):
Is my local bank going to be there for me?
Speaker 9 (12:43):
Depends, I mean, it all depends on what building, who
you are, you know, it's all of those issues.
Speaker 6 (12:49):
All of those things are are important.
Speaker 9 (12:52):
And you know, there are some loans becoming due at
the end of this year and next year. I think
next year, twenty two, twenty six, some loans are maturing
in the commercial realm. It's something like one point eight
trillion dollars, So that's what people are concerned about. But yes,
there is money out there and people will lend. It's
(13:12):
tighter than it has been. Credit has been really hard.
But at the end of the day, if you have
are somebody that has done projects and people will lent
to you and it's the right project and it makes
sense and you can prove it.
Speaker 6 (13:24):
Yes, but it's not what it was, you know.
Speaker 9 (13:27):
I think the economic uncertainty, the higher rates, inflation, even tariffs,
all of that stuff, you know, has people rethinking things
and being a little bit more cautious.
Speaker 5 (13:40):
I think everyone was kind of waiting for the big
fallout to happen and it never really did. Does that
eventually happen or is it going to be on sort
of property to property rolling basis over the long term.
Speaker 9 (13:52):
Yeah, I don't know if there's going to I mean,
predictions are impossible. We none of us know really because
every day is a different news story and what's going
on in the economy. So I don't know if there's
going to be some sort of huge fallout, if it's
going to get rougher.
Speaker 6 (14:10):
It could, but I do think it's depends.
Speaker 9 (14:12):
It's almost like if you look at retail, which is
a mixed bag. You see, you know, Walmart's opening up
and Trader Joe's opening up, but then you see Walgreens closing,
and so you know it's and so it just depends
on what it is. You know, there's it depends on
what is happening and what the business is and where
(14:33):
it is and all of those things.
Speaker 2 (14:36):
Best talk to us about South Florida.
Speaker 3 (14:39):
Is it still strong or is it rolled over?
Speaker 9 (14:42):
You know, South Storea, Florida is is doing well. It's
it's it's decent. It's it's it's steady. There's demand. Uh,
And you know, I think there was an article today
in the Journal about Florida and the demand for real estate.
There is decent people but want to be in Florida,
and there has been this sort of migration of businesses
(15:05):
moving to Florida, and so I think that has remained
the same. I don't see that changing anytime soon, so
we'll have to see all right.
Speaker 2 (15:14):
Best, Thank you so much for joining us. Always appreciate
getting your perspective. Best for reading. She is the chief
chief executive officer of Brown Harris Steven's giving us an
update on kind of global real estate. Again, a little
bit of uncertainty out there in just the overall economy
even finding its way into the real estate maybe not
going to hold off on a certain project, or hold
(15:34):
off on upgrading or something along.
Speaker 5 (15:36):
I feel like this reminds me of the default cycle
we were supposed to see in twenty sixteen, Like that
huge fallout that was supposed to happen that all the
private guys were all excited about.
Speaker 6 (15:46):
That huge wave didn't happen.
Speaker 5 (15:48):
It didn't mean there weren't opportunities, but that wave didn't happen.
It feels like something similar is also evolving in the
commercial real estate space as well.
Speaker 2 (15:56):
Yeah, and we were told by a lot of bank
anlysts that you'd see probably more in the small, mid
sized banks who maybe had some more local commercial real
estate and residential real estate as opposed to the large banks,
which really real estate is a small, small part of
their loan portfolio.
Speaker 1 (16:12):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (16:26):
Let's talk new energy finance. I don't know how the
whole new energy world is going to play out with
President Trump here. It just feels like, boy, that's a headwind.
But we're going to break it down. So we've got uh,
we have here, We've got Paul Ascano, Bloomberg BNF Seniors.
Sochit So, Paula, how do you guys think about wind, solar?
(16:48):
I mean, just all these new greener energies just frame
out for us kind of is it is this administration
a headwind to that? And if so, by what degree?
Speaker 3 (16:58):
Yeah? And thanks for having I'm back.
Speaker 10 (17:02):
Certainly, every industry we have to we have to look
at every industry separately and in conjunction. We have to
align to understand what are the common threats and then
what are the individual characteristics of each of those industries.
So so far we've we've seen obviously offshore wind has
been badly hit, mostly because offshore wind is heavily, heavily
(17:24):
reliant on federal agencies and federal authority, whereas solar has
been pretty much unstoppable.
Speaker 3 (17:32):
There's very little things.
Speaker 10 (17:34):
That Trump and the administration can do to really slow
down growth. And then battery storage with this nation, technology
that's coming to support both soul and win generation has
also been i would say somewhere in the middle. Not
as badly head as offshore wind, but tariffs have had
much a much bigger impact because the US still imports
(17:56):
a lot of the batteries from China, because the batteries
apply chain is not as diversified as a solar or
the wind supply chain.
Speaker 5 (18:04):
So you guys have a no doubt that talks about
how US clean power build will caudruple by twenty thirty
five despite all.
Speaker 3 (18:11):
Of these risks. That's a big number.
Speaker 5 (18:14):
So you mentioned that solar is unstoppable, battery and energy
storage potentially also, can you walk us through your outlook
for solar in particular.
Speaker 10 (18:21):
Yeah, the reality is the US and pretty much everywhere
in the world will need power. What's the fastest, cheapest
new source of power generation? It's solar like hands down,
It's easier, quicker, to build. If you can get the
permits and the great connection on time, which are really
the only bottlenecks to get to getting new solar built,
(18:44):
then it's very very hard to stop. And we've seen
that all over the world, especially now the US gas
nuclear there's a you know, there's talks about a renaissance
for both of these technologies. But the reality is is
that physical there's physicaltions to building gas and to building
nuclear that probably most of the audience is very familiar with.
(19:06):
With soul, you don't need pipelines, you don't need to
build new pipelines, you don't need to improve new pipelines.
You just grap panels, You install them, you connect them
to the grid, and that's it. And then you have
new source and new source of generation. And the reality
is that despite the efforts from the administration to revitalized
fossil fuels and nuclear, the easiest thing to build the
(19:27):
solar and it's and it's going to continue to be
to be like that for a long time.
Speaker 2 (19:31):
Well, talk to us about the towers here, Like, if
there's one hundred and forty percent tariff on a battery
coming in from China, doesn't that make a lot of
projects just unfeasible economically.
Speaker 10 (19:41):
Yeah, that's a great question. And there's certainly some battery projects,
big battery projects in parts of the US there are
going to be delayed. There's going to be probably delayed
by twelve to eighteen months as everyone figures out what
the final tariff.
Speaker 3 (19:54):
On China will be.
Speaker 10 (19:55):
But the reality is, if we look at what happened
to the solar sector and the global soular supply chain
back in the day when Obama started introducing high tariffs
on solar panels, supply chains re route very very quickly.
So we do expect eventually with the next couple of years,
if tariffs in China continue to be pretty high and
the risk of using Chinese batteries remains pretty high, irrespective
(20:17):
of what the tariff level is, we do expect some
new capacity coming online in South Korea and Southeast Asia
as well as in the US.
Speaker 5 (20:26):
What about battery storage and energy storage, So.
Speaker 10 (20:30):
Battery storage is as I said, it's what it's mower
hit for by tariffs and solar because of its reliance
on China. So we had to we had to re
assuming a slowdown in new additions because right now the
ramp up has been pretty quickly, but the role of
battery storage for power markets has been very, very critical
(20:51):
over the past couple of years. It has probably arguably
saved Texas from blackouts in the past twelve eighteen months
because the bit of batteries to ramp up quickly and
meet peak demand. It's it's it's really it's fascinating and
and it's really quick to dispatch, and and and we
think it's going to play a big and bigger role
(21:12):
in markets outside of Texas too in the US.
Speaker 2 (21:15):
How hard How hard is it to get connected to
the grid? If I build a wind farm in the
middle of West Texas like I saw on land Man,
they're off the grid.
Speaker 3 (21:23):
How do you get stuff to the grid. It's very
very difficult.
Speaker 10 (21:27):
The some of the difficulties are obvious when there's a
very very long distance between where you're building the farm
and where you want to deliver the power. So you
need to get transmission built, which means you need to
get everyone along the way who owns the land where
that transmission, where those transmission lines are going to be,
to approve to like allow you to build it, which,
as I'm sure you can imagine, is a very very
(21:48):
tedious process. You need different regulatory approvals, and then to
get connected to the grid, you have to undergo years
and years of different system studies where they have to
assess what's going to happen if your wind farm now
connects to the grid, what's going to happen to all
the power flows going in all directions. Imagine just doing
(22:08):
that study for one farm, and they do this for
pretty much everyone who's applying for the grid at the
same time or the same grid connection point. So the
engineering is really really complicated, and it's been by far
the biggest bottle night of getting any new source of
power generation.
Speaker 5 (22:25):
And yeah, is it easier to do that or build
a pipeline?
Speaker 10 (22:28):
Thirty seconds easier to do that than build a pipeline,
I would say, except if you're in Texas or Louisiana.
Speaker 5 (22:34):
Okay, well that's a fair point. Also, I'm obsessed with
the transformers, like the thing you need to plug into
the grid, like just that one piece of equipment is
the backlog is huge.
Speaker 8 (22:43):
Remembers the frequencies have to match as well, otherwise you
will have a big problems.
Speaker 5 (22:50):
Hence all the years of study and then also the
questions of how much alternative or intermittent energy you want
on a grid. Just ask Spain and they're blackout from
a couple of weeks ago. It was really great to
see you. Thank you very very much, Paulo Ascano. He
joins us from Bloomberg b n EF. They do all
the great research on energy across the board, whether clean
energy or otherwise. And they do technology and they do financing.
(23:13):
It's really quite interesting. You should definitely check out their research.
Speaker 1 (23:16):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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weekday ten am to noon Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
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