E31: The State of Real Estate with Rob Kumer

This podcast is brought to you by Gensler Wealth. The information discussed today is meant to be general in nature and not tailored to your specific investing circumstances. This means that you should talk to your regular Gensler wealth advisor or your own advisor before acting on any information we discuss today. Nothing in this podcast is intended to be a solicitation, and past performance does not guarantee future returns. Today's Guess has some great ideas for how our multiple levels of government should operate. For those not used to practicality and common sense when it comes to government, this could be shocking. Today on the Unlimited podcast, we speak with Rob Coomer, recently appointed CEO of Kingset Capital, an $18 billion Canadian real estate powerhouse. We talk about the state of Canada's real estate market, the Canadian economy, and Rob's outlook for 2024. Let's go. Well, welcome everybody to another episode of the Unlimited podcast. I feel like it's been a little while since we talked about investing. A couple breaks over the course of, of the various months. I'm very excited today. I think as a good year end last podcast of the year, try to give you a little sense of what's going on in the world and the economy, but really with the real estate lens. And very lucky to have my friend Rob Coomer, who is the incoming or recently appointed, I should say CEO of Kingset Capital. He's been there for 20 years, so it's not like he's incoming. He is recently appointed. Rob joined Kingset in 2004 and as I say, just recently appointed President and CEO effective Jan.1. Rob is a HBA Ivy Business School classmate of mine from way back in the late, late 90s. We're a little bit old. He holds the HBA degree from, from Ivy and he's a member of the school's advisory board and also director of Sinai Health System foundation in Toronto. So very excited to have you here, Mr. Coomer. Thank you very much.

Great, great to be here with you, Brian. Delighted to join you. Thanks.

Awesome. So, you know, I always say I'm going to leave the full bio to, you know, the, the show notes. So we don't have a huge bio here, but I think it is critically important.

There's not a lot to talk about.

What's that? There's not.

Bio is not very deep. There's not a lot to talk, but we covered a lot of it.

But what I think is critically important to give our, our, our listeners a sense of who we're talking to. I want to just go back, way back to the you know, mid-1990s when I first met you, because it paints a picture of really who I think you are today. So I was a fresh faced, I guess, freshman at Western 1995, first couple weeks, and that is the prime fraternity rush season. And I didn't know if I was going to rush a fraternity. Not, who knows. And I arrive on campus, there's a whole, I don't know what you call it, the big concrete field outside of the library there. And in a scene straight out of Animal House, I see a larger than life gentleman. Probably wouldn't have called him that back then. Larger in life, guy with a mohawk, really just extolling the virtues of joining his fraternity. And really a strange encounter for me, but I could tell this guy had something, some charisma. And this guy was our guest, Rob Coomer.

So my, so I was selling, I was selling. So the funny story you recount, I was there. That was me. I'm confirming it, right. I'm corroborating your details. And you caught me. Second year at university, I was in charge of recruiting new, you know, new rush members, as you were. So I figured, you know, as you said, there's a sea of fraternities, we're all trying to attract the, you know, the best and the brightest. And so I figured, you know, let's do something that's, that, that'll at least, if nothing else, let me stand out.

Right.

So, um, you know, I, I, I, I guess I had a funny haircut. I sort of probably was dressed a little weird.

Yes.

And I was roping guys in. That's the, that's sort of.

Well, and I hear when Kingset does some of its biggest deals, you pull out that razor and do the Mohawk as well to really differentiate yourself and Kingset. That's what I hear. I don't know if that's true or not, but that's what I hear.

A bit of a different style today. A bit of a different, A little more refined, a little more.

So this begins. So, so I like that you say that because to really paint the picture of, of Rob now, he is one of the most suave, best dressed, nicest looking guys you've ever seen. He's in a full suit and tie here. I'm not even wearing a tie. And so I often wonder if Rob today met rob 25 or 30, whatever it is, years ago, you know, like in one of those scenes from a movie. What old Rob with the mohawk would say about new Rob, coolest looking guy around.

So anyways, There would be a few lessons to teach. So suffice it to say it's been a bit of an evolution.

Well, well, so perfect. So all joking aside, you know, you've been unbelievably successful coming out of Ivy as we did way back when. And so I thought it'd be great to have you on here. And again, just to reiterate, you know, and you'll explain what King said is and how you got there, but from my understanding of the firm having known you there for many years and reading and prepping and why I thought this would be good for our listeners. Kingsit is involved in a whole variety of different areas or sectors I guess of the real estate space. So office, uh, they own actually Scotia Plaza, one of the biggest buildings and office buildings in Toronto. Industrial, residential, retail, urban hotels, including the Royal York Hotel development. And involved in these sectors both as an equity provider, but also lending, a lender and mortgage lending. So you really. My point is for listeners, you have your finger on the pulse of the whole sort of real estate world over here and I thought that could give us a really good insight into what's going on both in real estate and the economy. Can you though, don't let me explain King said, because I'm not going to do a good job. Can you just explain for listeners what King said is and maybe how it evolved to what it's doing now?

Yeah, of course. So, so I mean, you gave a good overview. Kingset is a private equity real estate investment business. So we raise large pools of capital from institutional investors and high net worth, ultra high net worth investors to be invested through different strategies both on the equity side and on the credit side in real estate opportunities in every asset class, in every part of the capital stack and in every market across Canada. We're a Canada only strategy, so we don't do anything outside of the country. But what we've decided to do is focus relatively in a narrow set of geographic restrictions, meaning just Canada, but play in every part of the real estate business in the country. And over time our objective was to create enough strategies to cover the whole risk return spectrum. So if there's an opportunity in Canada that presents itself, we basically see it. I mean We've got 160 people in three offices, Toronto, Vancouver and Montreal. And so we're out looking, talking about in the middle of the, you know, in the middle of the storm. And so if there is an opportunity that that comes up, we can see it and if we like it, if we think it's A good opportunity, we can generally fit somewhere into our world and if we can't, then, and if we like an opportunity and there's no place for it at Kingsat we're probably missing a strategy that we should start. So we start a new fund. And that's sort of been the evolution of the business over time. When I started in 2004, the business started in 02, I joined in 04. We had one strategy, it was an opportunity fund strategy. We call it our growth funds. And from there we added on other strategies as we, you know, as we evolved. Our debt strategies started in 2006, our core income fund started in 2008 and then we add on from there our urban fund, all the various businesses that you spoke about. And so, you know, that's sort of been the mantra as we've gone. And today we have, you know, a series of open end and closed end equity funds and a series of credit funds that really span the entire capital stack in all asset classes across Canada.

Wow. And so maybe discuss a little bit then your evolution and we'll come back to King said in some details of how you invest. But you know, we went to school together. What's your evolution post school to enter the real estate world. And then King said, like what? Give a, give a little bit more of your background maybe.

Yeah, sure. So. So summer of summer of 1998, summer between my first year and second year of IV HBA, as you, as you commented on, I was in a summer intern for a company called Gerode Realty. They were an office leasing brokerage business here in downtown Toronto was run by a guy named John Trode who's a terrific guy out in Alberta. He was just an office leasing shop. So I spent four months working for great group of guys there who have all since dispersed into various other real estate businesses in the city. But basically I spent four months doing office leasing or learning office leasing and deciding that brokerage wasn't, you know, my particular long suit. I just wasn't really cut out for it. I didn't really like it very much. So I went back to school for my second year, finished in April or May of 99 and came out and went to go work for a company called Center Corp. Center Corp. Is a, was a combination of a property, a retail property management business and shopping center development business up in Markham and worked there for two years until effectively they were so, so, so the business that I technically worked for was called Center Fund Realty. So it was a joint venture between a publicly Traded real estate business called Center Fund Realty Corp. And a. And a private North American development group which was the private development company that I worked for. Center Fund Realty was bought out by First Capital. What is now First Capital was a company back then called Gazit, which was an Israeli based shopping center business. When Center Fund was bought out, the development business that I worked for was shut down. I effectively was let go, for lack of a better word. That would have been middle of 2000, 2000. I went to go work for RioCan. So I was on the investment side at Riocan for four years and that was a terrific experience. Worked for a young woman. Her name was Katie Ritzy and she was, you know, young, talented, made a lot of money. They loved her. It was, it was a great experience. But I sort of spent four years and realized it was a bit of a flatline job. So I set out for something a little different. At that time, when I went to go look for a new role, I was looking for something outside of retail because I had just done retail, real estate up until that point. I was looking for something more entrepreneurial because at the time, again, Riocan when I started was about a billion dollar business. By the time I left in 2004, it was a 4 to 5 billion dollars. It was a lot different. So over that time, a lot of growth, both people and assets. So I was looking for something a little more entrepreneurial, looking for something, you know, in, in asset classes other than retail. And so I went out looking for a job and I came across, you know, what was then a very young king set. It was actually called King Street Capital Partners at the time, a very young private equity real estate business that had at the time raised one opportunity fund. 220 million opportunity fund. And I came to meet with the guys here, led by John and you know, so that was it. They offered me a position, which was amazing. It was exactly what I was looking for. And so I started here in 2004. And to be honest, if I have to, if I have to sort of think back, if you had asked me at that time how long I would have been here, I probably would have told you like three or four years. I had stayed three or four years at RioCan. It felt like an eternity. I probably would have told you, you know, like 2007, 2008, I'd be gone. But you know, John's, John's been a remarkable mentor, partner, friend, leader, CEO. The business has been evolving, changing, growing, you know, all the way through that time. My job has been evolving, changing, growing over that time. And it's been a hyper engaging atmosphere and environment, very entrepreneurial. Um, we're always doing interesting things and you know, huge opportunities here. So 20 years later, believe it or not, here I am. And it's been a remarkable ride.

Amazing. And so from one fund, 220 million. What, what's the size of the business now?

So Today we have $18 billion of assets under management, you know, 160 people, as I said, in three offices and you know, a series of funds. We have our, we have our core income fund, which is a $5 billion business. We have our growth funds. We just recently in August of 2022 raised $2 billion of capital for our eighth growth fund. So when I started we were on our first growth fund, now we're on our eighth and they've been successively, you know, bigger as we've gone. We've got an urban infill fund which is about $800 million, a residential development fund, which is about a $300 million condo development business. Our credit business today is about $5 billion funded. We have a CMHC lending business. We have a prime residential mortgage business which lends money to non bank customer homebuyers. We have an affordable housing business today which is developing affordable housing in the gta. And as, and as you commented earlier, we have our hotel business as well, which is comprised really of two separate hotels, the Royal York in downtown Toronto and the Courtyard Marriott Hotel, which is a 575 room hotel just north of the corner of Young and College. So, you know, all told, it's a big business, it's complex and it's, it's again crosses all the asset classes all the way across the country in every part of the capital stack.

Amazing. I want to come back to some of those sectors as we dive in, but maybe before we go into specific sectors, if I can ask you more of a general question. Obviously you say you're looking for interesting opportunities. You either have a solution or you'll create one. But what's, what's your process and approach as an investor, private equity investor, lender, et cetera, in the space? What's the approach to looking at opportunities, finding, looking, evaluating and then sort of deciding this is, this is going to be great for us and our investors?

I'd say it's a, it's a risk based approach.

So.

A lot of real estate, a lot of real estate investors, I, at least my observation is that a lot of real estate investors in Canada are very focused on returns. Returns are easy to measure, right? You have a, you have a pro forma, you have a spreadsheet. You plug in some numbers and you're constantly looking at what the returns might be, right? It's easy, it's objective, it's easy, it's on a spreadsheet. It's, it's easier articulate and finger and point a finger at. The more challenging part of, I think any kind of investing is this doesn't go for real estate. This would probably go for any kind of investing. But our toughest job is to evaluate risk. What can go wrong and what's the downside? What's the penalty for it going wrong and then making the judgment call as to whether or not you think the, the upside, the reward or the returns properly compensate you for what can potentially go wrong. And that's the art of the deal, right? That's, that's more art than it is science. I think what we do well or what we have or what we have constructed, which helps us do that well at Kingset is we have really cross platform expertise. So we have, you know, people across the platform that are experts in all the various things that they're doing. So we can, a couple of things. One, we can evaluate leasing, leasing potential leasing risks, you know, in all the various asset classes because we have experts in all those asset classes in our credit business. We have expert lenders that have, you know, been trained at banks and been trained at, you know, tier one financial institutions and have gone through our own training. We've got, you know, people in development who can, who can underwrite and understand the risks associated with building things and zoning things. So we have credit people so to, you know, so people can understand. We have people who understand or who are experts in borrowing money. And what is, what is the, you know, what is the process for borrowing money? Look at. In our affordable housing business, we now have people are experts in dealing with CMHC and running that process. So we are constantly looking at things through the screen of what are the potential risks and what are, what are the penalties for things going wrong and then understanding and making an ev. Making a judgment call effectively as to whether or not the potential returns properly compensate. Our job at the end of the day is to decide whether or not or to try to generate premium risk weighted returns. So premium returns relative to the risk we're taking on. If we can do that properly, then on balance, because there are deals that go south, I mean, us along with everybody else have, have deals that have not gone the way you've planned. But the key is to, is to limit the downside in each of those. Call it bad deals so that they don't, you know, they don't contaminate the rest of the business. That's the secret sauce that I think we do pretty well.

Right? Amazing. Okay, so that's a little bit about your investment process. I love it. So again, you, you mentioned all the different areas that you see and sort of have expertise in. So maybe this is the big question, and I'll probably ask it a couple different times throughout with a little bit more specificity. But what in general, if you step back, what are you seeing today in terms of what the economy looks like to you and what are you feeling from, you know, your property buyers, the lessees, the home buyers, whichever the different sectors are in? What are you seeing and feeling and maybe how is that different today than it was, you know, a year or two ago?

Yeah. So, I mean, this is what we think about, you know, each day we get up and come to the office. I'll break down a couple, which we're.

Going to get on as well. Coming to the office.

Yeah, no doubt.

We'll do that later.

We'll do that later. I'll break it down a couple different. Into a couple, couple different. I think large themes that, that are dominating our thinking. First, you know, interest rates, which I don't know whether we're planning to come to that in this discussion or not, but for sure, without it. Without a doubt, interest rates are dominating the airtime in real estate, probably more so than perhaps any other industry out there, because real estate is a, is a business that depends on leverage. Largely depends on leverage. So interest rates are a big theme. Our view is that interest rates have peaked. I mean, we're either at peak interest rates or they're in fact behind us. I mean, bond yields have come in over the last three, four weeks. But our sense is that we're at peak rate, peak rates, and we're going to start seeing cuts. I don't know whether it's first half next year or second half of next year, I don't know. But like, we're certainly. The ship is now at least turning and starting to point out, you know, in the, in the direction that we all wanted to point it into that and that is lower rates. But we think the rate cuts are going to be a little perhaps slower and more gradual than a lot of others. But, you know, certainly a constructive interest rate outlook. The economy is, I'd say, in a state of malaise. I don't know if we're in a technical recession or not, but at the very least, it feels like a recession. I think we are headed for a soft landing, so to speak. And the way we think about that here is to say we'll see some period of economic contraction, modest economic contraction, no real pressure on employment. I think the bigger risk in Canada is actually the productivity story, not so much the employment story or the GDP story, because what we're doing is. We are. The population is growing faster than the economy is growing. And so everyone is getting a. A smaller slice of the same size pie. And to me, that's the biggest threat that Canada as a country faces from an economic perspective. But generally, you know, a weakening. I would say there's a. There is a soft weakening economic outlook. Our operations in the portfolio are steady, so our buildings across the platform are generally full, Rents are generally growing and tenants are generally healthy and paying the rent. So we actually see a pretty constructive operating outlook, which is really good because if you have a general. If you have got a healthy operating outlook, the balance of the business sort of tends to take care of itself. I mean, if you have tenants who are paying rent and your buildings are full, life is generally a good place to. Regardless of what the investment market looks like. That said, the investment market today in Canada is frankly locked up. So it is very quiet. There's not a lot of.

What is that when you say the investment market, investment in new real estate, or the.

The. The trading of real estate? The transaction, the real estate transaction market is very, very wide. And I would describe it as being locked up, meaning there's not a lot of buyers. You can, as you probably read in the newspaper, but there's also not a lot of sellers. So what you're seeing is basically a stalemate in the investment in the real estate investment market. So everyone's just standing still. For us, that's imperfect, it's not fatal, but it's imperfect because we do a lot of trading in and out. All of that said, I think at a more macro level, we see a relatively constructive macro environment with tailwinds that remain intact. We've got solid population growth, which is a story in Canada that you don't see everywhere. And we've got the strongest population growth of any country in the G7. It's helping us on the one hand with real estate and demand for real estate. It's hurting us on the productivity side. But all that said, it's a tailwind for real estate. More people need more of everything. They need more places to shop, live, work, you know, warehouses to ship their goods in and out, et cetera, et cetera. So for real estate, population growth, you know, it was a real tailwind. We've got a very rock solid banking sector. So going back to the leverage question, real estate depends on a solid banking sector and Canada would have amongst the very best in the world, highly regulated, highly consolidated. So for real estate that's a really, really constructive component of that of our business. And, and we've got a, what I would say is a moderately inflationary environment which I think will stick around for a while. Again, a tailwind for real estate. Moderate inflation drives economic rents, it drives replacement costs, it drives, you know, it drives value for existing. So with a, you know, good access to capital through both a solid banking sector and strong equity markets, good population growth driving demand and, and moderate inflation, I think net, net, you have a really solid environment for real estate over the long term, despite some short term volatility and headwinds when it comes to asset liquidity and, and, and equity demand basically for new assets.

Doesn't the last two points that you mentioned, the population growth impact that moderate inflation? Because if there's lots of population coming in, demand for more things, doesn't that keep inflation moving up whereas the government is trying desperately to have that come down?

Yeah, yeah, I mean, I think that's, I think that's exactly right. So you've got, you know, the federal government driving pol, you know, having policies that are running counter to what the bank of Canada is trying to, Right. Trying to restrain. But, but net, net. I think what you end up have, what will end up having is a moderately inflating, you know, environment which, which again is good for real estate.

Okay, and what are you seeing now maybe diving in a little bit more specifically on the, on the mortgage lending side. You mentioned you've got the CMHC mortgage lending business. Maybe you can explain what that means. And then probably non prime or sorry, prime lending, but not through the bank. Maybe you can just explain that too. And then once you've done that, what are you seeing there? Because these are I think home buyers or home multifamily homeowners. And now we're getting really down to the individual and what they're doing and feeling.

Yeah, so, so first of all, the lion's share of our credit business today is commercial lending. So it's lending to real estate investors, developers, landowners. It's doing a combination of first mortgages and high yield lending in the Commercial space for, for sale housing. So developers got a piece of land, he's got to service it, build homes, sell them condo developers buying land, you know, putting pre sales together, building a building, develop an investor who's buying a warehouse needs a, needs a, you know, a second mortgage or what have you. So that's, that's 80% or 90% of our lending business. Is that the, the, the smaller part of our business but growing, but, but actually a growing, A big, very much a growing part of our credit business is CMHC which is effectively sourcing first mortgages. CMHC insured first mortgages for apartment building owners. So you know like the, all the, all the usual suspects that own apartment buildings that you know, come to us, they're looking for a loan from CMHC or insured at least by cmhc. We help them through that process and go source the capital, do that, you know, rock solid business. Like there's no problems there. The, the what we call our prime mortgage business which is lending money to non bank customers from non B20 compliant customers who are buying homes are largely made up of borrowers who are either new Canadians, so they're new to Canada and don't have the credit history or the relationships with a tier one financial institution to borrow money from them or they're self employed so they might have non verifiable income, you know, that sort of thing. Yeah, these are customers who would otherwise be, but, but very strong credit scores. So they have hyper strong credit scores. They, they are buying homes in highly liquid markets. So we generally stick to the GTA and greater Vancouver area. Deal size is pretty moderate. So I think we have a max of just over $1 million mortgage. We don't want to do a home more than a million and a half or you know, so $. So generally like a highly liquid part of the market. And so like that's sort of where that's the space that we're playing in. Generally our mortgages are bridges to something else. So someone who for example is new to Canada, comes in, buys a home, borrows you know, $800,000 from us, spends a year paying us their interest, building up their credit and then they'll go to, they'll replace us with a bank. So it's generally a bridge to something, it's a year or two and so on and so forth. What we've seen in that business has actually been remarkably interesting. So we started that, we started doing it in, in early 2022 just as the market was peaking and we were doing it on balance sheet, on our own. On our own balance sheet. So we hadn't raised a fund to do it, we were just doing it on our own. And as the, as the market started to crest in February, March of 2022, we wanted to see, we, we knew it was cresting. I mean the world knew it, the world knew it was cresting. So we weren't, we weren't saying or seeing anything that no one else knew. But we wanted to see how the borrowers reacted or at least how the security reacted in what we thought was going to be a challenging environment with, with house prices that were falling. And believe it or not, we had no defaults. So it was a remarkably resilient business model. And we felt that despite the fact that we saw some house, you know, some volatility or some headwinds in the housing market, the borrowers continued to pay their mortgages and were able to refinance us. So we never had a situation where, you know, the borrower went to the bank and couldn't get the mortgage or couldn't, couldn't replace us from another private lender or so on. So it turned out contrary to what we would have thought. I think at the time, it turned out to be a remarkably resilient business model and the borrowers were healthier than we thought. And so just now we're starting to build that business now in our core fund and we'll eventually raise a new fund to try to do that at a larger scale. But it's been a very, very good business for us.

Awesome. Now that being said, if it started, what's the general, generally the terms, the term rather of those loans of those mortgages?

Yeah, the terms are about 12 months.

Okay.

You know, they generally start as 12 month mortgages and then either the borrower replaces us or they come back, they need an extension, in which case sometimes we extend it. We, we re, you know, we reappraise all the houses and either get some sort of pay down if we feel we want one or not, but generally they're about, they run between 12 and 18 months and then they recycle us out with, with another, with another first mortgage lender.

Okay. Yeah, because I guess the concern is not necessarily for that business, although it could be, but in general now many people's sort of five year term of their mortgage is, you know, in the latter half of that amount are coming due post these sort of big interest rate increases. I'm not, I'm not talking your business specifically necessarily, but in general and I Wonder how that impacts, you know, the.

Economy, everything trying to do those concerns certainly get a lot of airtime. But from our observations, what we're seeing with, with mortgages that have already rolled is that a, you know, they've aimed a lot of, a lot of borrowers have am down their mortgage. So they're not refiing the same mortgage that they had five years ago. If they're on a five year mortgage.

What does mean for the listeners they.

Paid amortization down over the course of five years. So if they start off with a million dollar mortgage on a million and a half dollar house, just picking numbers, five years in, their mortgage will be 800,000, it won't be a million. So now they're refiing 800,000. Now it's possible through a home equity line of credit. They've been drawing that back up and maybe it's still a million. But there are cases, you know, many cases where, where borrowers have paid down that mortgage over the course of five years. The other thing is people's incomes typically grow, right? So a borrower that borrowed a million dollars five years ago doesn't look the same, may not look the same five years hence. And, and so, and the last, and the last part is that home, you know, people will reign in spending in other places so they travel less, they go out for dinner less, they go to less Maple Leaf Gate, they, they keep their car a little longer. You know, like all the things that probably you and I are doing, you know, on maybe on a different scale but are doing in order to afford, you know, where things have been tightened a little bit. And that's exactly the effect that the bank of Canada wants. They're raising the interest rate so that borrowers are spending less money in other discretionary items which bring prices down. And that's what we're seeing. And so it's playing itself out really in a sort of, I think in sort of a textbook fashion. And I think actually the bank of Canada has done a reasonably good job.

Amazing. Yeah. Look, for your business and for the banks, I guess you're right. I think the absolute last expense that people are going to, you know, they're going to try as hard as possible not to miss their, well, rent payment or their mortgage payment because they, they need to live, they need to have a roof over their head.

So rent and car, rent and car or interest, mortgage payment and car are the last two things people stop paying.

Right. Amazing. Good. I love that explanation. Thanks. Okay, so let's talk a little Bit about what's going on, you know, in the city, in the country. If you listen to the news, all the politicians, Olivia Chao, Doug Ford, et cetera. Toronto's number one. Let's pick on Toronto. Toronto's number one challenge, it seems at this moment, if I listen to what everyone is saying, is we don't have enough housing, shortage of housing, affordable housing, but in general shortage of housing. What's your view as to. Is this the number one issue and priority of our city province right now?

It's a huge issue. It's a huge issue. Is it the number one issue? You know, I think there's a few number one issues that Toronto is facing and I think you can probably say the same for Vancouver as well, because they're all the same issues. It's housing, it's crime, it's homelessness, which I put in a different category than homeless than housing in the narrow sense, because housing I look at as housing affordability. There's housing affordability, there's crime, there's homelessness, and I'd say there's mental health and addiction. I think, I think those are, you know, to me, the biggest issues, existential issues facing Toronto and Vancouver. But let's just pick on Toronto. As you said, the good, the good news is that there's lots of bad news, but I think the good news is that it's reached the top of the priority, the priority list of basically every politician at every level of government, municipal, provincial and federal. And I think it's starting to get, you know, you start with it being a priority, then it gets the attention. Now execution is a different story. And we'll have to, we'll have to see, and we can talk about that, but we'll have to see how we execute. But ultimately I'm, I'm encouraged by the fact that it, it is at least the very first topic of discussion that everyone, that everyone's paying attention to because it is, it is really quite, quite an important issue.

And great for your business, I guess. Good spot to be in this space that you're in. Major cities are focused on this dramatically.

Yeah. So interesting. You know, the housing affordability crisis has added value to existing assets. I mean, existing assets are worth more money because we haven't supplied enough housing. So, for example, if you're in the apartment building business, no one has made more money over the last 50 years than apartment building owners, okay. Because we've done everything we can to stifle new supply of housing. So if you own it, if you happen to own an existing asset, it's worth, you know, so much more today than it was, you know, a number of years ago. And that'll continue to happen until we. Until we stabilize housing and basically increase demand so that people have choice. So I'm not. I'm not sure that necessarily. I mean, we own apartment buildings, but I'm not sure that we're necessarily the direct beneficiary of that. I mean, the fact is that we're also a landowner and. And we develop new housing and taking that, a lot of the reasons why we have an affordability crisis, because the timelines to develop and supply new housing are so long that we haven't been able to do it profitably, which means, you know, that that negatively impacts us. So, net. Net. I don't know if we're a beneficiary or not, but. But I think, you know, nonetheless, it's. It's a. You know, it really is an issue that needs to be addressed.

And what do you think about Olivia Chow's new initiative to have the city become builders?

My view is that there is not a. There's not a track record to point to that shows that any level of government is particularly adept at executing anything when it comes to real estate development. I mean, I hate to say it, but infra. Even infrastructure development, you know, so I'm not. I'm not a proponent of that. But I also think there's a sort of a bigger question when it comes to housing supply, and that is it's not so much about who's going to build the housing or exactly what the policies are. And there's lots of good ideas out there and lots of good policies, lots of great discussion about how to go about doing it. I think what the bigger question is and what has been more problematic is the lack of coordination between various levels of government. So, for example, the federal government has an immigration policy, and I'm a supporter of immigration, so I don't have a problem with the policy in the narrow sense, but I don't think there's been any coordination with the provincial government, who needs to supply the transit, for example, and the municipal government, who needs to figure out how. Where to. Where to house everybody.

Right?

So you have these. You have these three levels of government all operating in a vacuum, basically doing whatever they think is politically, you know, is politically in their favor and they're not coordinating with one another. And to me, that's the bigger issue, because I think there's lots of smart people with great ideas and there's Lots of great ideas that you've seen rolled out through the cut throughout the country that are additive to housing. You have laneway housing, you have, Calgary is giving, you know, subsidies to office building owners to convert their buildings to office building, sort of convert their office buildings residential. You have, you know, you have ideas about avenue density, Avenue road, you know, like medium density. So could we put five or seven levels of density along every road in Toronto that has four lanes or more? You've got, CMHC now has a bigger allocation towards for affordable housing. I mean you've got all these things, all these great ideas that are, that are going, that are offered or at least are on the table to be offered. You just have no coordination between the various levels of government and in fact many cases they're contradictory to one another. So you have all these people, you know, you go back to immigration, we have, we have all these people coming into the country and you have people who live in the country who in many respects are saying great, we have more people but, and we should intensify the city. But not, but not, not, not like it. Not actually in my neighborhood. I don't actually want a tall building near where, because you know, traffic's already bad where I live so we're gonna have to put it somewhere else. And of course everyone's saying that so it doesn't go anywhere. We have affordable housing projects that would be straight down the middle of the fairway for the city. You know, new buildings, zero carbon affordable, affordable rents, market housing design. So housing that you and I would live in, you know, it's not substandard living and we can't get it approved. We're now approved, but it took five years to get a project approved in Etobicoke because the, the, the local counselor there wanted to, wanted us to add extra parking because they didn't, you know, now, now like chances are people who use affordable housing or live in affordable housing don't have as many cars as people who live in market housing. I mean that's just like intuitive. But it was a way of stalling the project, right? So he wanted us to put in extra levels of parking, which of course is never economic. I mean more parking than you need is never economic economic to install the problem for years. And there are a whole host of other issues, but you know, those are the kinds of things that we're running into in, in this city and, and in other parts of the country which are stifling new supply of housing, which is exacerbating the affordability crisis. And I think it's, I think it's tragic because it's. We, we can get it done. We just haven't had the various levels of government coordinate with one another yet. The last piece I'll just say before we, before we move on is, you know, the immigration strategy could very easily focus on the skills that people have to get into the country, right? So you could be bringing in plumbers and carpenters and, you know, welders and so on and so forth, but they're not. I mean, they, like I shouldn't say they're not. They may be, but it would be by coincidence only, right? So they're not targeting the people that we need to fulfill the roles that we're short. And it's not just construction. It's, it's healthcare workers, it's teachers. It's, you know, like there's a whole list of, there's a whole list of professions that we're short on. It would be, it would seem sensible to me gear our immigration strategy to the skills that we need. That would, that would take coordination between the federal government and the provincial government and the municipal government sitting down at a table saying, okay, what's the vision for 25th? Okay, what is, what is Canada? What are the major cities in Canada want to look like 30 years from now, 25 years from now? And now how do we formulate a strategy to get there? And what are the various levels of government have to do to be a constructive part of that strategy? Instead, you just got every level of government doing whatever it wants and we're nowhere.

Are you sure you want to be the CEO of Kingsat? Maybe we can get you into this mix of government here.

Yeah, not a chance. You don't want me, you don't want me in government. I don't want to be there.

So not a chance. One last question just around housing in particular affordable housing. And I don't. You're the expert here. I have no idea what your answer is or what the answer is, but I assume if you have a dollar you want to maximize that dollar for the benefit of, you know, yourself, your investors, et cetera. Affordable housing by its nature I assume as a. A layman here is it's housing that is not good at fetch top dollar. You know, that maybe could otherwise who is fully on market what the economics for Kingsat or other builders of building affordable housing versus saying no, we're not going to get involved there. We're going to focus on where we can make the most money. Is it Is it a profit generating initiative? And obviously you have a fund, so I've got to assume the answer is yes. But I'm just curious, how does that work on the affordable housing?

Yeah, it's a great question. Um, and our goal is to like, we're not trying to save the world, right? Kingston's not trying to save the world, but Kingset is trying to offer opportunities for investors to achieve a whole bunch of goals, one of which is helping a social agenda, you know, to some extent helping a social agenda while creating value at the same time. And creating value by, I mean, by generating economic returns that are, that are acceptable. And our affordable housing business is no different than that. So for example, we are building, as I mentioned, a project in Etobicoke, we just broke ground a couple weeks ago. And through a series of interest rate concessions and help through cmhc, through deferred fees and taxes and a few other levers that are pulled, you know, in the gut with various different levels of government, we have a project that makes economic sense. It's not all affordable. We're building 500 units, a third are affordable, two thirds are market. So it's all about trying to shoehorn. And every project is different. We have a project in Scarborough which we're just negotiating now, another one in North York where it's a prepaid land lease. So basically the city is rolling in land and you prepay the land lease a dollar which gives you a 99 year land lease which, so you effectively have no land costs. That's another way of doing it. So there's, there's lots of different structures and levers that you can pull to help make the economics make sense. At the end of the day, everything we're doing makes econ, has to make economic sense or else we're not doing it. The encouraging part, you know, and I told you a moment ago, we were talking about all the, all the challenges that we face. The really encouraging part of all this is that there is tons of institutional, particularly institutional, but also all dry net worth capital looking to help solve the housing affordability crisis. There's lots of capital prepared to invest in these kinds of projects provided they make an economic return that makes some sense. And so for me, as, or for Kingset, as an asset manager, that's a really encouraging picture because now we know that if we can crack the code, if we can figure out how to pull the right levers at the right time and create a model that makes economic sense, we've got lots of capacity to be able to get a lot of great things done. So we're just on the cutting edge of that now. And our project in Etobicoke is the first part. We'll have two or three more projects, you know, over the following few quarters which will follow on, you know, that same model. And ultimately we're going to create a pathway to getting this, to getting this issue solved. But it is, you know, it has been a glacial, it has been a glacial process, unfortunately. But I do think we're sort of on the cusp of starting to really roll this out. I'll give you another example of a social agenda item which is sustainability, right? The whole issue of zero carbon. So zero carbon has been, you know, on real estate agenda for, I don't know, five years, seven years. But no one can. Everyone talks about sustainability and zero carbon as though it's nothing but a cost center. So no one's been able to, you know, no one's really rolled it out in scale except for us. I mean we've, we've cracked the code. So for example, Scotia Plaza. You mentioned Scotia Plaza at the beginning. It's a 2 1/2 million square foot complex. We're now certified zero carbon at Scotia Plaza. So we've fully electrified the building and we're, we're zero carbon certified. First building really of its kind in the country. There's maybe one or two other buildings of its kind now across Canada, but it was really a leader in that space. We registered the Royal York Hotel zero carbon about two weeks ago. At 100-year-old hotel. We ripped out all the electrical and mechanical equipment from, from the, from the sub concourse level, replaced it all with brand new equipment, went to Deep Water Lake, Deep Lake water cooling for the hotel and now it's Certified zero carbon. $65 million project. Took five years of engineering study to get that done. So again, we're really, we really are a market leader in the space. And it's not because we're out to save the world. It's because we're out to generate premium risk weighted returns. And if we think we can invest strategically in our assets and end with an asset that's more resilient, lower cost to operate, attracts tenants, so on and so forth. We think we're creating value despite that it might be a large investment upfront. And so we've done exactly that.

That's amazing. Yeah, I think you answered the question that I was just going to ask, which is, okay, you put 65 million into the Royal York to make it zero carbon. What's the roi? Everything's ro. You're not doing that, as you say, just because you're nice people, I don't think.

Right.

What's the return on that? Is it that it's lower cost over many, many years?

Yeah, so, so the way that works is, first of all, we are nice people too. Those aren't mutually expensive. But the way the, the reason that worked is because there's some operating cost savings. So there's a little bit of that, which is, which is helpful. And we financed it with the Canadian Infrastructure bank who gave us 30, 20 year, 25 year financing at fixed 3% self amortizing.

Wow.

So, so, you know, gave us killer financing, 80% of the cost, killer financing, killer fixed rate. So there, you know, it's an example of how the federal government can work with you to get something remarkable done. And that hotel is the only one of its kind that's zero carbon in Canada. Might be the only one of its kind in North America that's zero carbon. It's a market leader, but took five years. We've had it, we've had a sustainability team at Kingside for 10 years. Right. We've invested heavily in that space. So it's not like you can turn around tomorrow and all of a sudden get all this stuff done. This has taken a long time to prepare, a lot of research, a lot of skills, a lot of people and a lot of money to invest, you know, because we felt this is the way the world's going. And now we're starting to finally see, for example, Scotia Plaza. We've done leasing at Scotia Plaza, office leasing with tenants who have come to Scotia Plaza specifically because it's zero carbon. They have a mission, they have a corporate mission that they're, that they are going to have a zero carbon footprint. You can't have a zero carbon footprint if you're not in a zero carbon office building. So guess what? There's two, there's two office buildings in Toronto that are zero carbon. They both belong to us. So if you want to, if you want to lease space in a zero carbon building, you're a king set customer. If you want to run a conference or have a wedding or a bar mitzvah, or just stay in a hotel as a tourist or a business traveler and be zero carbon. There's only one hotel in Canada that you can travel to, it's the Royal York. So I mean these are all things that are just starting to get traction, but we think over time will really accelerate and you can't wake up three years from now and decide you're going to be zero carbon, like it's just not going to work. So we've invested a decade in this and now it's all starting to come to fruition.

I love it. Amazing. Okay, so let's change gears just as we're coming to the tail end. Um, so, you know, even the president of King said for a while, you're, you're, you're gonna be the CEO, so you're the leader. Um, I know you've been pretty vocal on LinkedIn over the last number of years about a whole variety of topics. Uh, I just want to hit on. We'll just touch on two things. Number one, which may seem like an old topic, but I don't think it's old, which is the state of work today. Work from home, hybrid working work in the office, you know, and you, you own office buildings all over the country. What are you, what are you seeing, what are you doing? And what do you think the next number of years look like as it relates to this whole working environment for, for folks across the country or, or the world? You know, start with, you know.

So what I'm seeing is that business leaders across all industries want their people back in the office. And I think that's undeniable. We're seeing pushback at some levels, we're seeing pushback from employees. But by and large, leaders want their people back because they know and understand that the only way you can serve your customer in an optimal fashion is to have all your people in one place for at least much of the time. It doesn't have to be all the time, but at least much of the time. Collaboration, creativity, values, dissemination and all those sorts of soft skills don't evolve properly if you're not together and if leaders aren't demonstrating live and in person for the younger people in an organization, how all those things work. So we're seeing people bringing their employees back to the office. It's not five days a week, it's at best four days a week. Friday's dead. And just, just to give some context for the listeners, our office portfolio is dominated by AAA core buildings in the urban part of Toronto. Okay, so I'm not speaking for portfolios of buildings in the peripheral. Like we have 5 million square feet south of Bloor Street. So like, we are really quite focused in the urban part of the city. So we are doing Kingset's A4. We're four days in the office full time. Fridays will work from anywhere. If you came into Kingsense offices on any given Friday, you'd see me and maybe two dozen other people. We're 160 people. You'd see maybe 20, 25 people like that. So most people are choosing to work from either their home or wherever it is they're choosing. I think it's working fine. I don't have any challenges, like I don't have really any problems with it. But increasingly, you know, you're seeing leaders want their people back. And if you were to walk around downtown Toronto, particularly through the, through the core, triple A core buildings, you'll see Tuesday, Wednesday, Thursday feels pretty normal, Monday's lighter, but still feels pretty good. And Friday's dead and I, and I think Friday's not coming back. Like, I think, I think that's where I think we're going to obviously four days in the office, three days, you know, one day work from anywhere, two day weekend. And that's sort of where this is all going to settle. That all said, what we're seeing is basically tenants are maintaining their footprint. So we've done, for example, 300,000 square feet this year of leasing in Scotia Plaza. Tenants are, and that's a combination of tenants who are renewing within the building and new tenants who are coming from other buildings. Tenants are generally keeping their footprint. They may shrink a little bit. They come to you, they come to us often with an ambition to shrink by 15, 20%. And by the time they're done space planning and figuring out what they really need, they're basically back to where they started and everyone's sort of taking the same amount of space. What you're, what you're not seeing is the tenants that are taking the incremental space. So for example, an office, an office user who would take, he'd lease, he or she would lease two floors and they'd sign on for an option on an extra half floor, they'd sign a lease on an extra half floor and sublet it. You know, that kind of thing. They're not, they're not expecting to need more space in the future. What, that, that's the signal that they, that they think they can fit into their footprint for a long period of time. That to me is not a work from home issue, that's an economic issue. So what I, when I think about office, the, the, the future of the office market, I actually, I'm sort of past work from home and, and a lot of us in this industry are sort of past work from home. It doesn't really, we don't view it as an existential threat, perhaps that we did in, in the early days of, of 2021 or you know, what have you. Like, it's pretty, it's pretty evident that office users certainly in the institutional world are going to need an office put print and they're generally going to need an office footprint that's pretty close to what they needed historically. What your question? There's two things that are, that are affecting the office leasing market more than work and Paul, and that is just the general economic uncertainty and anxiety. So I think eventually that will turn. Don't know when, but eventually that will turn. And the, the recession in tech Toronto was very heavily dependent. The office market in Toronto was very heavily dependent on the growth of tech. Tech has, tech demand has basically disappeared. So you know who's here is here, but there's no one new coming. And the groups that are here that were taking wide swaths of space are no longer doing that. And that's had a way bigger impact on office leasing than work from home. And just to give you a few data points, the downtown Toronto office vacancy today is 16 and a half percent which is quite a bit higher than what it was historically. Certainly coming into Covid. Covid. We were going into Covid with like 3% vacancy. Okay, so it's, it's balloon vacancy in AAA towers in downtown Toronto. So that's basically the Bank Towers, Bay Adelaide, Brookfield Place, you know, like AAA Towers is six and a half percent. So it's a third of what the general vacancy is. So it tells the story of the non Triple A. They're really, you know, they're sort of taking it on the chin. The Triple A tower. Six and a half percent is not what it was, but it's certainly not even close to being, you know, fatal. And what it's showing you is that tenants are using the softness in the office leasing market as an opportunity to move upscale. And that generally happens in soft office market. Tenant will move upscale. So they'll go from a B building to an A building, an A building to double A building and so on. And so like we feel pretty good about it given our portfolio. We do think about office leasing in terms of what we call net effective rents, which is the, which is the net between the face rates or the rents that people that tenants pay to the landlord, $40, $45, $50 a foot, whatever it is, and the inducements that they get for entering into the deal. So a tenant will give a tenant allowance, they'll give Some free rent and so on and so forth. So what we've seen over the last couple of years is that the face rents that tenants are paying have basically held steady. They've even grown a little bit. But the inducements that they're getting have, have, have gone up. So it's costing the Lord more, which, again, is a feature of a, you know, a point in the cycle that we're at. And again, that will turn. The tech business needs the capital markets to stabilize. Tech, as you would know, needs venture capital. It needs the public markets. It needs, you know, it needs private equity. It needs all those things to cooperate, to really, you know, find its horsepower. And today it's just not, you know, there's too much volatility in the world today to allow that to happen. But I think it's indisputable that in the fullness of time, the tech business will resurface, and tech demand, you know, will resurface, and that'll be good for the office business. But at the moment, you know, it's sort of steady as she goes, and her office buildings are doing pretty well.

Good, good. Okay, so thanks for that. And I want to ask you one other question as you again step into the CEO role. I don't know, your. Your CEO or. Or soon to be chairman. John. Well, I admire everything he is putting out on. He's very vocal on LinkedIn, which is, you know, I guess the main.

He's prolific. He's prolific.

He's prolific, but literally, almost everything he says just makes an absolute ton of sense. I love. He's riding the subway, taking pictures and showing what's going on. He's in the city taking pictures of congestion and asking what the heck is going on. I love it. Maybe one day we can. You can help convince me to convince him actually to come on this, on this show. But absolutely, you're coming. You're stepping into issues as CEO. You mentioned at the beginning he's, you know, a mentor of yours, which makes sense after 20 years. What's. What's the biggest lesson that you think you've learned from him and you'll take into this new role? I know we're all over different topics here, but I love to.

Well, I think that's a, that it's a. Yeah, that's. That's a great question. And there's. There's two things that stand out for me that are miles ahead of everything else. Okay. And, and. And this is, you know, when, when we think about, certainly when, when others talk to me About King Said and John and you know, his history and Kingset's background and his history at Oxford, which was where he was before Kingset. They talk about the economic returns, you know, they talk about all the stuff that I guess you would talk about as an outsider, right? Economic returns, how much money we've raised, how big the funds are, how much assets under management, you know, like all the stuff you can sort of point to and say, geez, like, you guys are so successful, or you know, like. Like the obvious things that stand out. But what John has taught me is so far different from all of that, which is two things. One, values matter. Values are the critical piece to making all of this work. And it's things like integrity and accountability and intensity and, you know, it's all wrapped up into our. What we call our North Star, which is the value of relationships. And as I look back on my career and think about what I've done well or what certainly what John has done well and what I hope others that work with me do well, it's the. It's the creation and nurturing of relationships. And we have a. You know, we have a rule here. We always say is doing the right thing is always the right thing. And so we push decisions down, we give people the autonomy and we, we. We empower people to make decisions every day that perhaps a lot of other organizations would have funnel up to senior management. And that's part of what we do well, is that we delegate and we, and we. We allow people to do things on their own. And it's all against the backdrop of doing the right thing is always the right thing. Making mistakes is fine. Making mistakes is a byproduct of making decisions. So no problem, you're allowed to make mistakes. But just do the right thing, treat people right, respect, you know, and it all sort of. It all culminates in the value of relationships. And that's first and foremost what John has taught me in business, insofar as business is concerned. The second thing that he's taught me, or at least he's demonstrated for me, is the value of. And. And. And that it's poc. That it's in fact pork possible to have work life, balance, is that it's possible to have a beautiful family life with a great relationship with your wife and children and grandchildren, and to take advantage of all the opportunities that life affords you to travel and experience great things. And you know, like all those. Do all the extracurricular things that you want to do and have a. And have a successful business life and be, and, and be viewed as a community leader and do all those things well. And so, so, so often, particularly growing up or if I, you think back to when you were in business school, you know, you're, you're bombarded with the idea that work 24 7. Work 24 7. Work 24 7, you want to, you want to make money, you want to be successful, you got to work 24 7, which is, you know, you got to work hard. I'm not, I'm not not advocating for not working hard. You have to work hard, but balance is such a big part of it, and he has demonstrated that for me, and I hope I can help demonstrate that for other people at King Set. So it would be those two things. It would be values and work and, you know, work life, and call it life balance. And I don't want to call it work life balance, because then it makes it seem like work is not part of life. It's life, balance and values. And those two things is really what John has taught me.

Most amazing. Okay, so last question. If you've, if you've listened to our show, and I know you are a avid, never miss an episode listener of the Unlimited podcast.

Yeah, I listen a lot.

I, that's why I said, I know. Who doesn't? Who doesn't? So our theme here is, our tagline is your wealth unlimited. Because unlike maybe some other firms, maybe can't speak about, you know, what everyone else does, but our view is we can help families in any way that touches them financially or that affects them financially. We can look at any investment. We're not constrained by, you know, whatever whole variety of factors that maybe some other firms are. So I always like to ask our, our, our guests last question. If you weren't, you know, 20 years at King said, if you weren't the CEO, if you weren't doing what you're doing now, the world's Unlimited to you, you could be doing anything right now. What, what would that be?

Oh, wow. Wow. I wasn't expecting that question.

But we only ask it to every single guest on every episode. So you, that means you don't listen.

Right to the end. I don't, I don't listen. I don't listen right to the end. Listen to about 45 seconds left.

Right?

What, what would I be doing? I gotta tell you, like, I, I, I'd be in business for sure. I'd be in business. Um, I'd be, I'd be an entrepreneur. I mean, at the end of the Day. I, I do have an entrepreneurial spirit inside of me that burns. Um, and when I said earlier on in the podcast, you know, I thought I'd be here three, four years and then go, it would be, it would be specifically with the intent of starting my own business and it would probably be a real estate business. The reason I stayed is because John has allowed me to, you know, engage with that DNA, despite the fact that I'm not, you know, I never started a business from scratch. And I have so much admiration for people like you, for example, and John, who start businesses from scratch, because I think that takes a lot of guts, a lot of nerve, a lot of passion, a lot of, you know, like a lot of energy. I mean, that's something that I have not ever done. But if I, if I was not a 20 year king setter, if I had left four years in, in 2008, I would have started my own, probably my own real estate development business. That's where I would be.

Nice. Amazing. I love it. All right, Mr. Coomer, I appreciate your time. You've got lots of stuff to do over there, lots of things to build and grow. So thanks for giving us sort of the picture of what's going on in the real estate and maybe economy today and what we can maybe look to for 2024, which I'm sure folks are thinking about as it's around the corner. Wish you the best for the holidays. Thanks for everything. Really, really appreciate it.

Delighted to be here. Thanks for having me and look forward to the next time. All right, thanks, Brian. The unlimited podcast is hosted and produced by Brian Ginsler and is edited and mixed by myself, David McMillan. This podcast is not to be taken as investment advice. If you like what you heard, don't forget to rate the podcast and follow us on Social medianslerwealth. Thanks for listening and see you next time.

Foreign. So those who know me and have had Zoom sessions with me or have seen some of the videos of this podcast, will generally notice a Beatles poster or picture, I should say, behind me. For those who are big Beatles fans and might have owned the Sgt. Pepper's album in actual vinyl form, and they might have done this on the CD as well. You will know that at the end of what was then and probably still is the longest single held chord in music history without the use of special effects, that's the E chord at the end of a day in the life. After that, if you wait a few seconds, you will hear what sounds like a very high pitched whistle and then a little tape loop and that that high pitched whistle was meant to when the record ended and it just kept spinning around, it would emit that high pitched whistle and it was meant to annoy anyone who had dogs. So the dogs which would start barking. So a little, a little trick that the Beatles did at the end of sergeant Pepper's for those who are lucky or unlucky enough to listen past the absolute end of the album. So for those who are listening to this past the end of the podcast and the outro credits by the amazing David McMillan, I wanted to just say to everyone, this has been a great, great year for the podcast. We've covered a number of topics, everything from bonds, artificial intelligence. Just after ChatGPT was released, we've done two podcasts on real estate investing, including this one. We got some words of wisdom from the legend Ira Gluskin, did some discussion about tax effective giving, took a little detour over the summer and talked about coffee sales and tennis. Came back to private equity and a little bit of financial literacy among one or two others. So hope everyone enjoyed. It's a challenging and difficult time in the world right now. I just wanted to end off 2023 by saying thanks for your support and confidence, especially to our clients and thanks to our listeners and wish everyone a very happy and healthy holiday season and let's hope a very peaceful 2024. All the best and we'll see you soon.